Google debuted Android Pay during yesterday's opening keynote at its I/O developer conference. But the most interesting payments news came at a late afternoon session, where executives from Google's commerce division showed off a prototype of a hands-free feature that will soon be beta testing in San Francisco. Customers can walk into a store, say, "I would like to pay with Google" and walk out without having touched their wallet or phone.
We've seen attempts at this before, most notably Square's Card Case. That product let customers open a tab with a merchant and then pay for a purchase by identifying yourself to the cashier. It relied on geo-fencing to confirm your identity by matching you to a certain device. But the service was limited to 20,000 merchants and never found significant traction. PayPal had similar approach with Beacon, a USB dongle that used Bluetooth to give users the same hands-free payment ability.
A feature that could help Google differentiate from the competition
At yesterday's Google event it was announced Hands Free would be starting in beta at Papa John's and McDonald's, so if it work they will soon have a broad base of stores at which to deploy. You can request an invite to help field test it here.
Osama Bedier, who helped to create Google Wallet and was at yesterday's event, said he thinks Android Pay will have a much greater chance of achieving broad success. "They got the banks and the carriers on board. They made it friendly to merchants reward programs," he noted. "Add in this kind of delightful technology, which solves a real pain point for the consumer, and you are talking about a sea change in payments occurring over the next three to four years." A Google spokesperson said its too early to know if and when Hands Free would be integrated with Android Pay.
Verge Video: We tried Android Pay at Google I/O 2015