23rd March 2016
Google has revealed it will be ready to launch its Android Pay system in the UK “in the next few months”.
The system is similar to Apple Pay and will allow users to make purchases by tapping their phone on the contactless card reader, as long as their handset is compatible.
When Android Pay launches it should be accepted everywhere that currently accepts contactless payments, including Transport for London buses and stations.
Customers will enter their card details into a digital wallet stored on their phone.
HSBC says it will be the first bank to offer Android Pay in the UK. Google has also agreed a launch with First Direct, Halifax, Lloyds, Nationwide Building Society, M&S Bank, MBNA and Bank of Scotland, but so far there has been no mention of Barclays, Santander or Royal Bank of Scotland, which also owns the NatWest brand.
HSBC says the introduction of Android Pay follows the recent trial of its Nudge app – which is designed to help people keep better track of their finances – and the announcement of the roll-out of TouchID, and VoiceID, offering alternative ways for customers to access their bank account.
Francesca McDonagh, HSBC’s head of retail banking and wealth management in the UK, says: “Our customers want an easier and more convenient banking experience, that is why we are investing heavily in digital innovation.
“Whether it is making it easier for customers to access their accounts through voice biometrics and fingerprint recognition, help them make better financial decisions with ‘nudges’, or to pay in an instant with contactless technology and Android Pay, we are giving our customers the tools to take more control of their finances.”
Pali Bhat, senior director of product management at Google, adds: “We’re excited to bring the simplicity and security of mobile payments to HSBC customers with Android Pay. Soon, people will be able to use their Android device to pay at almost 460,000 contactless payment terminals in the UK.”
But what do the experts think? Dr Markos Zachariadis is an assistant professor of information systems at Warwick Business Scholl and specialises in pay technology…
He says: “There’s no doubt that Google’s Android Pay will challenge Apple Pay and Samsung Pay. Android Pay has the advantage of being available to many smartphone devices that use its OS software – like Samsung, LG, HTC, etc – while Apply Pay is restricted to the last couple of iPhone versions.
“However, just like in the case of Apple Pay, the question is if these mobile means of payment will replace the use of plastic. The evidence is quite discouraging as penetration in the UK hasn’t yet been as amazing as anticipated.
“Looking back to 2015, which was when Apple Pay launched to gave it a head start, statistics tell us that a few consumers have installed the capability but generally there’s lack of motivation to use it as the advantages are not groundbreaking – there was no ‘wow moment’ as some people put it – and there are also compatibility issues.
“Both Apple and Google rely on the existence of near-field communication (NFC) technology that also needs to be installed at the point of sale. This at the moment creates a barrier as not all retailers have NFC-compatible terminals since there’s no regulation to force them.
“The exception to the rule is Samsung Pay which utilises a unique technology (MST) that will allow users to use the existing magnetic-strip technology to make payments where NFC capability is not there. In addition, the collaboration of banks and card issuers is demanded, which is there, but again rather slow in most cases.
“While mobile payment technologies are not yet as popular, the move of Apple, Google and Samsung will put pressure on retailers to adopt newer technologies and make the customer experience more seamless. The real push, however, will come when additional capabilities will be added onto the payment applications by interacting with other retailer and loyalty apps, thus avoiding to have to insert card details every time you need to make an online or in-phone payment via an application. Change is going to eventually come but maybe it will be somewhat slower than anticipated.”