Google Pay: Service, Ecosystem, History and Availability

Life Oct 26, 2020

Google Pay (stylized as G Pay; formerly Pay with Google and Android Pay) is a digital wallet platform and online payment system developed by Google to power in-app and tap-to-pay purchases on mobile devices, enabling users to make payments with Android phones, tablets or watches. In addition to this, the service also supports passes such as coupons, boarding passes, student ID cards, event tickets, movie tickets, public transportation tickets, store cards, and loyalty cards.

The rebranded service provided a new API that allows merchants to add the payment service to websites, apps, Stripe, Braintree, and Google Assistant. The service allows users to use the payment cards they have on file in their Google Account.

Service

Google Pay uses near-field communication (NFC) to transmit card information facilitating funds transfer to the retailer. It replaces the credit or debit card chip and PIN or magnetic stripe transaction at point-of-sale terminals by allowing the user to upload these in the Google Pay wallet. It is similar to contactless payments already used in many countries, with the addition of two-factor authentication. The service lets Android devices wirelessly communicate with point of sale systems using a near field communication (NFC) antenna, host-based card emulation (HCE), and Android's security.

Google Pay takes advantage of physical authentications such as fingerprint ID where available. On devices without fingerprint ID, Google Pay is activated with a passcode. When the user makes a payment to a merchant, Google Pay does not send the credit or debit card number with the payment. Instead, it generates a virtual account number representing the user's account information. This service keeps customer payment information private, sending a one-time security code instead of the card or user details.

Technology

Google Pay uses the EMV Payment Tokenisation Specification.

The service keeps customer payment information private from the retailer by replacing the customer's credit or debit card Funding Primary Account Number (FPAN) with a tokenized Device Primary Account Number (DPAN), and creates a "dynamic security code generated for each transaction". The 'dynamic security code' is the cryptogram in an EMV-mode transaction, and the Dynamic Card Verification Value (dCVV) in a magnetic stripe data emulation-mode transaction. Users can also remotely halt the service on a lost phone via Google's Find My Device service.

Consumer Device Cardholder Verification Method (CDCVM)

In EMV-mode transactions, Google Pay supports the use of the Consumer Device Cardholder Verification Method (CDCVM) using biometrics, pattern, or the phone's or watch's passcode. The use of CDCVM allows for the device itself to provide verification for the transaction and may not require the cardholder to sign a receipt or enter their PIN. Additionally, in certain markets which have a 'no verification contactless limit' using contactless cards (such as the £45 limit in the United Kingdom and the C$100 limit in Canada), the use of CDCVM can enable merchants to accept transactions higher than these amounts using Google Pay, providing their terminal software is updated to support the latest network contactless specifications.

History

Originally launched as Android Pay, the service was released at Google I/O 2015. Android Pay was a successor to and built on the base established by Google Wallet which was released in 2011.^[19] It also used technology from the carrier-backed Softcard—Google had acquired its intellectual property in February 2015. At launch, the service was compatible with 70% of Android devices, and was accepted at over 700,000 merchants. Google Wallet still powered web-based Play Store purchases and some app-based peer-to-peer payments, for instance in Gmail.

On January 8, 2018, Google announced that Google Wallet would be merged into Android Pay, with the service as a whole rebranded as Google Pay. This merger extends the platform into web-based payments integrated into other Google and third-party services. The rebranding began to roll out as an update to the Android Pay app on February 20, 2018; the app was given an updated design, and now displays a personalized list of nearby stores which support Google Pay.

Ecosystem

Google Pay has a passes feature, which exists in a larger ecosystem. They are presented in the passes tab of the app and can be sorted manually. Developers must first be granted access to the Google Pay API for Passes before they can author such items.

Google Pay with a N26 credit card attached. — Photo by Mika Baumeister / Unsplash

In its simplest form, an interaction (or transaction) between a pass and a system is facilitated by a 1D or 2D code, although it requires the customer to initiate the activity. Passes can also contain nothing but plain text or an image.

In addition to retailer-specific passes, Google Pay also supports contactless student IDs through the Transact eAccounts application, as well as transit tickets and passes such as the Las Vegas Monorail and Portland Tri-Met'sHop Fastpass.

Passes that can be transmitted through NFC are only available through the Android platform, but passes that are available through 1D/2D codes are available online and through the iOS app. However, the Wear OS version of Google Pay doesn't feature passes at all, instead only offering payment features.