The difference between Android Pay and Google Wallet.

Ever since the announcement of Android Pay, it has stuck in my crawl that people somehow think that Android Pay is Google's response to Apple Pay. Even the tech media keeps repeating the same line, that somehow Android Pay is Google's answer to Apple Pay.

Google Wallet has been available for the last three years, and the only differences between Android Pay and Google Wallet, is that Google has decided to change the API to its payment system and isolate fund transfers to its Wallet. Before Android Pay, apps had access to Google Wallet API; take for instance Newegg.

On the desktop, Newegg's checkout allows you to use your Google Wallet.

And on its mobile app from the Play Store, you can use Google Wallet to pay for your cart.

In both cases I'm purchasing a set of 2x8GB DDR3 1600Mhz RAM. With the mobile app, the discount code was automatically applied, whereas the desktop website did not. The takeaway here, is that contrary to any BS you might have read elsewhere, apps and websites alike already had a Google Wallet API to use.

So why the change in the API?

With Apple Pay, your financial institution must support Apple Pay; with Google Wallet, you can add anyone's credit or debit card or bank account, period. It goes back to how Apple Pay is set up to make those wireless payments, via tokenization, whereas Google Wallet issues a temporary card number for each transaction.

In moving from Google Wallet to Android Pay, instead of relying on a temporary card number for each transaction, Android Pay will go the route of Apple Pay, and use tokenization, thus requiring the support of each financial institution.

At this point, I can only offer speculation as to why Google would want to limit its ecosystem to financial institutions who support Android Pay, but it appears that it was a concession of sorts, in order to shut down Isis / Softcard, when Google bought them out. I obviously think that it's a bad idea to require the support of institutions when you can bypass them, and according to the WSJ, those institutions (Visa / MC) are using their heft to block Google from getting a cut in the share of the mobile payment transaction fees.

In other words, Google got PWND by the system, and we're about to get a lame (re: Apple) payment system, where you'll have to wait to participate, if you use a credit union or regional bank.