Google's Android Pay mobile payments service arrives in the US

The search giant's revamped mobile payments effort competes with offerings from Apple and Samsung.

Richard Nieva Former senior reporter
Richard Nieva was a senior reporter for CNET News, focusing on Google and Yahoo. He previously worked for PandoDaily and Fortune Magazine, and his writing has appeared in The New York Times, on CNNMoney.com and on CJR.org.
Ben Fox Rubin Former senior reporter
Ben Fox Rubin was a senior reporter for CNET News in Manhattan, reporting on Amazon, e-commerce and mobile payments. He previously worked as a reporter for The Wall Street Journal and got his start at newspapers in New York, Connecticut and Massachusetts.
Richard Nieva
Ben Fox Rubin
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Google said Android Pay is coming to more than 1 million locations in the US. James Martin/CNET

For Google, the second crack at mobile payments could be the charm.

Android Pay, the search giant's latest attempt to spur people into paying for items using their smartphone, launched Thursday, the company said in a blog post. Google struck agreements to get the service into more than 1 million locations in the US through retailers including Macy's, Whole Foods and Walgreens.

Google said the service, first announced in May, will also store gift cards and loyalty cards on phones powered by its Android software. It will support credit and debit cards from the four major payment networks: American Express, Discover, MasterCard and Visa. Later this year the service will work with mobile apps as well, Mountain View, California-based Google said.

This isn't Google's first ride at the mobile payments rodeo. Four years ago, it made a foray into credit cards and payments using a service called Google Wallet. But that was a struggle from the get-go. Few retailers supported it, a couple of wireless service providers disabled it, and it didn't always work. Google on Thursday also announced a new version of Wallet that will focus only on sending and receiving money through Android phones.

Competition in the space has been heating up since last year when Apple announced its own service called Apple Pay. About 72 hours after its October debut, over 1 million credit cards had been activated on Apple Pay, more than all similar services combined, according to Apple.

The success of Apple Pay has led other tech companies to offer their own flavor of the technology. Samsung in March unveiled its service, called Samsung Pay, for its Galaxy S6 and S6 Edge smartphones. A month earlier, Google acquired some of the technology behind Softcard, a payments system backed by several US telecommunications firms. Online payments giant PayPal, too, is working to improve its mobile services.

If Android Pay succeeds, it could help mobile payments take off and keep Google relevant in that burgeoning market. Smartphone payments at retailers are expected to surge to $118 billion by 2018, according to market researcher eMarketer. That would be up more than 3,000 percent from the $3.5 billion tallied last year.

As with other payment services, Google said it isn't transmitting consumers' credit or debit card numbers when making transactions. Instead, it sends a computer-generated account number as a stand-in. The service will be available on phones with specialized payments chips and powered by software made in the past two years.

Correction, 7:36 p.m. PT: Because of a typographical error, this story originally said Android Pay will not be available on phones with specialized chips. It will be available on those phones.