Daniel Goodman / Business Insider
Companies could use Android Pay to power their in-store or in-app payments with a single-tap.
Android Pay would be completely separate from Google Wallet, the company's current mobile payments product, though people who use Google Wallet could easily link their accounts to apps that use Android Pay. Google currently offers APIs for Google Wallet that can let sites embed a "Buy With Google" button, but Ars' sources weren't clear whether that would be phased out after an Android Pay launch.
The API would rely on "Host Card Emulation," which Google released with Android 4.4, which makes it easier for third-parties to supports near-field communication (NFC) payments. The advantage of Android Pay would be that customers wouldn't need to use Google Wallet, Ars reports. Since the company launched Wallet in 2011, the service hasn't taken off, but it passed a major hurdle Tuesday it when acquired assets from Softcard, a mobile payments company backed by Verizon, AT&T, and T-Mobile. Now, when you buy a new Android phone from any of the major US carriers, that phone will have the Google Wallet app pre-installed.
Android Pay's similarities, in name and otherwise, to Apple Pay are pretty obvious. If apps and stores could start using Android Pay to power mobile payments, it would be a simple way for the billions of people who use Android phones to pay for things. For Google, it would mean offline purchasing data that it could use to better target its online ads.
One notable difference between how Apple Pay and Google Wallet work is that Apple won't have any access to what users bought or how much they paid. Google, on the other hand, "sees" every transaction that a user makes.