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March 23, 2016

Google to expand Android Pay to UK

Android Pay lets users to make payments via their smartphone rather than a physical card

Google has said that it will extend Android Pay to the UK "in the next few months".

The facility allows any device running Android 4.4 or higher and fitted with an NFC (near field communication) chip to act as a tap-and-pay substitute for credit and debit cards.

Several lenders, including Lloyds Bank, HSBC and Nationwide have said they will support the scheme.

Samsung earlier said its rival service would also come to the UK this year.

The South Korean handset maker has yet to be more specific about its British launch plans for Samsung Pay, which is restricted to its own Android smartphones.

Apple Pay has been available in the UK since July 2015 but is limited to the firm's iOS devices, so will not compete directly with Google's service.

In-store or in-app

At present, Android Pay is only available in the US, where it became available in September.

A Google spokeswoman said it was now "likely" that the UK would become its second or third market. The only other expansion plan announcement has been about bringing Android Pay to Australia by the end of June.

The service requires a user to first store details of their cards within the app, and then provide a fingerprint scan or passcode to authorise a payment.

It can be used in stores and restaurants as an alternative to tapping a card on a point-of-sale terminal, or within apps to avoid having to type in account details.

Android Pay can already be used in the US to make in-app payments

In theory, it is safer to use than a physical credit or debit card as the owner does not need to reveal their account number at point of purchase, and even if someone was able to intercept the transmitted encrypted information, they could not re-use it to authorise further payments.

Google said it had struck deals with Visa and Mastercard to allow the service to stand in for their cards, as well as several UK's financial institutions including:

• Bank of Scotland

• First Direct

• Halifax

• HSBC

• Lloyds Bank

• M&S Bank

• MBNA

• Nationwide

That still leaves several big names missing, including American Express, Barclays, Royal Bank of Scotland and Santander - but Google said it intended to add more organisations to the list ahead of the launch.

Samsung takes the lead

Google's blog, which revealed the announcement, said that Android Pay had been "growing steadily in the US with 1.5 million new registrations happening each month".

But one expert suggested it was lagging behind Samsung's rival offering.

"Samsung Pay has made a bigger impact here than Android Pay and is being advertised more heavily," said Carolina Milanesi, a California-based analyst at Kantar Worldpanel Comtech.

Samsung device owners can use Samsung Pay as well as Android Pay on their handsets

"If you look at the type of early adopters most likely to buy into the idea of wanting to do everything via their smartphone, they normally fit with the type of person who buys a high-end Apple or Samsung device."

Many stores in the US are still moving from magnetic strip-based terminals to chip-and-pin systems, which gives Samsung another advantage as its facility works with both.

It is a different case in the UK, where chip-and-pin has been the de facto standard for several years.

One industry watcher said that while in-store payments were a useful feature, it was Android Pay and other digital wallets' in-app functions that should drive their adoption.

Google said that Deliveroo, JD Sports and Zara would be among the first apps to support Android Pay

"Most people have contactless cards in the UK already, and [they are already easy to use] when nipping into a shop to buy something," commented Dave Birch, a payments specialist at Consult Hyperion.

"But if you are an online service provider or any kind - whether you are Waitrose or Airbnb - you want to provide the best experience for the customer.

"The bit that's currently the pain is the customer having to fish out their card and look for the number on the back to complete a payment, and these services avoid the need for that."

Other handset-makers are also preparing rival Android-based digital wallets of their own including LG Pay and Huawei Pay

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