According to the source, the new application programming interface (API) will grant companies the option to add in-store and in-app payments to third-party applications.
Android Pay will act as a platform for customers to add and store their credit card data and make purchases with a click. In addition, according to the publication, companies which adopt Android Pay will be able to use the API for tap-to-pay transactions in traditional, physical outlets.
The new API will rely on Googles host card emulation (HCE), which allows an Android application to emulate a card and talk directly to NFC chip readers, rather than being emulated by a separate, secure element (SE) chip embedded within a device.
Google already provides a payment service called Google Wallet. The online payment service is a platform for web users to store credit cards and acts as a virtual card to make online payments or to send funds to other users. The Google Wallet Card can also be used in physical outlets if your Android device is set up for NFC payments.
According to Ars Technica, Android Pay will be built from the ground up for developers using HCE in comparison to Google Wallets structure and system. However, Google Wallet will continue to exist and will support Android Pay. This type of functionality in turn will give customers the option to link their Google Wallet to third-party apps which have Android Pay integrated.
While Google Wallet currently offers a number of APIs including the Instant Buy setup, which allows Android developers to bolt-on Buy with Google buttons in applications, this extended functionality is likely to appeal to companies exploring the potential of apps and contactless payments for both physical and digital stores.
Google has recently revealed the acquisition of SoftCard technology and patents.
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