How Android Pay Stacks Up to Samsung Pay

Say goodbye to your wallet. Barely a day after Samsung unveiled its Samsung Pay system, Google's senior vice president of product Sundar Pichai announced Android Pay -- a new platform for payments across the operating system.

Confirmed today (March 2) by Pichai at Mobile World Congress in Barcelona, Android Pay is, in part, an API that developers can use to build the service into their apps. Android Pay will not exist as a separate app; it will be built into Google's existing Wallet app. You should also be able to use Android Pay and NFC to make payments at participating brick-and-mortar stores, but details on how that will work aren't clear yet.

MORE: Apple Pay: Where You Can (and Can't) Use It

According to AndroidCentral, Android Pay will use tokenization, just like Apple Pay, to issue one-time keys (or tokens) that mask your actual credit card information during transmission. This way, even if your transaction is compromised, the would-be thief would be left with a useless string of numbers instead of your real credit card information.

Google recently announced a partnership with Softcard (formerly Isis Mobile Wallet) and will integrate some of the latter's technologies into Google Wallet. The search giant also announced that AT&T, T-Mobile and Verizon will pre-load the Wallet app into compatible devices later in the year.

But Android Pay and Apple Pay still have some limitations. Since those systems employ NFC to send payment information to terminals, they're only supported by bigger chains and retailers that offer compatible terminals right now. The newly unveiled Samsung Pay system packs technology that uses both NFC and magnetic secure transmission (MST) that imitates a mag-swipe transaction, making it acceptable at any place you can swipe your card. That's millions of merchants worldwide.

MST is a technology previously used in startup LoopPay's mobile payment accessories, and the company was bought over by Samsung earlier this year. We were pleasantly surprised by how seamless LoopPay's technology was when we tried it out last year at our local coffee shop. Paying for our hot chocolate was as easy as holding our phone up to a mag-swipe reader and pressing a button when prompted.

LoopPay's co-founder Will Graylin told Tom's Guide that what Android Pay offers is nothing new, since it's just an SDK for third parties, such as banks, to transmit tokens from their mobile banking apps. "Banks today can use SDKs from Visa, MasterCard and Discover, to use HCE (Host Card Emulation) for Android," he said, "The question is why should they use Google?"

Graylin also said that if Samsung ever opened an SDK to banks, it would have a major advantage. But whether that will happen is not clear for now. "We cannot say there is a date or a concrete offering at this time," said Graylin.

Staff Writer Cherlynn Low needs her bank account to fatten up and her actual wallet to slim down. Follow her @cherlynnlowFollow Tom's Guide at @tomsguide and on Facebook.

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