Android Pay, PayPal deepen partnership

Dive Brief:

Android mobile device users linking their Android Pay and PayPal accounts will soon be able to use Android Pay through the Chrome mobile browser to pay for purchases at online merchants that accept PayPal, the companies announced at the Google I/O conference this week.
The announcement comes about a month after PayPal and Google forged an agreement to make PayPal a pay option within Android Pay in stores, in apps and online. The PayPal integration with Android Pay will be supported on versions of Android OS 4.4 and higher, including KitKat, Lollipop, Marshmallow and Nougat, PayPal said.
In another announcement from Google I/O, Google said it will begin allowing Android Pay users to use any card they have on file with Google to pay with the mobile payment platform — not just those cards they already have stored in Android Pay.

Dive Insight:

A lot of people probably anticipated this news was coming after the companies agreed to make PayPal an option for Android Pay account holders to use when paying in stores, but that doesn’t make the move any less significant — and it is very significant.

Anyone with Android Pay can now pay with a single fingerprint-authenticated touch through Google’s own browser at any of the 16 million online merchants that accept PayPal. It’s huge for both players because Android Pay immediately gains much wider merchant acceptance, and PayPal obtains a streamlined, biometrically-secured payment process much less cumbersome than the previous process.

That is by extension is tremendously significant for any merchants that accept PayPal, and might be concerned that the traditional process causes friction for on-the-go mobile shoppers who might be more likely to abandon shopping carts of the mobile payment experience takes too long.

For PayPal, this is the latest demonstration of how it has begun to aggressively use partnerships to secure its place in a world of multiple digital wallet options and transaction channels.

Meanwhile, Android Pay can use all the help it can find as it tries to catch up with Apple Pay in the mobile payments market. Juniper Research recently said Apple Pay has exploded to 86 million users, while Android Pay has 24 million users. The expanding partnership with PayPal will help, but so will Google’s move to let Android Pay users select more cards they have on file with Google. That is likely to increase the chances someone with Android Pay on their phone will actually use it.

Android Pay may be badly lagging Apple Pay, but that is a problem that Google's Chrome browser doesn't have versus Apple's Safari. Google has a lot of heft it can still throw behind Android Pay and aligning the payment option closely with Chrome likely means Android Pay's best days are still ahead of it.