5 of Google's latest moves in payments

Voice-controlled commerce

Google's new "Actions on Google" platform eliminates what is possibly the biggest source of friction in mobile commerce: Getting consumers to download an app and set up an account for purchasing.

The new platform simulates the open-ended nature of calling a store to place an order, but includes certain perks of mobile commerce such as stored account information and pictures of products.

Google demonstrated this process by placing an order with Panera Bread through the Google Assistant built into its smartphones and the Google Home speaker.

"The platform handles all of the complexity," said Valerie Nygaard, senior product manager Google, in a presentation at the Google I/O developer conference on Wednesday.

The Google Assistant, representing Panera, suggested menu items with pictures and was able to access Nygaard's stored addresses and payment details without installing an app or setting up a Panera account. It used fingerprint authentication before sending any of this information to the merchant.

"I was in control of what I shared, every step of the way," said Nygaard, who described the process as "super easy, like I was talking to someone at the store. I didn't have to install anything or create an account."

Payments API for Chrome

Google will provide a payment request application programming interface (API) on its Chrome browser to allow users to more easily make payments on mobile devices through third-party apps.

Called the Payment Request API, the interface will allow those making payments on Android devices to do so without inputting payment card credentials or logging into PayPal each time, first reported by the xdadevelopers technology site.

Google's move to streamline payments from its mobile devices comes nearly a year after Apple revealed that its Apple Pay wallet would be supported through its Safari browser from online merchants supporting the payment method.

Last year, Bloomberg reported that Safari was the browser of choice in only 13% of the market, trailing Chrome, the market leader with 59%.

Biometrics in Android Pay

An upcoming release of Android Pay may have a biometric facial recognition component named “Visual ID," according to a recent report from 9to5Google based on a teardown of the app.

This functionality could be an extension of lessons learned from the recently mothballed Google Hands Free initiative, as well as an evolution of other initiatives such as Mastercard's "Selfie Pay."

Mobile payments and biometrics have had a close relationship ever since Apple Pay launched on top of Apple's Touch ID fingerprint authentication system. But even fingerprint authentication adds some friction, so companies like Samsung have been developing iris recognition and other forms of biometrics as a way to further streamline the authentication process.

The closest Google has come to facial recognition in the past was its Hands Free concept, which displayed a photo of the shopper to the cashier for verification. This concept resembled a model that PayPal and Square have separately experimented with, but didn't let the device itself play a role in verifying the user by his or her looks. It also relied on human judgment and, therefore, invited human error.

Next steps in VR

Google showcased the next major developments in its Daydream VR platform, which so far has been limited to its most recent smartphones. The company is partnering with HTC and Lenovo to develop standalone VR headsets, removing the need to own a compatible Android phone.

It's also making VR less clunky by redesigning its interfaces around voice control. For example, YouTube VR will support chat rooms that let people comment on videos by voice instead of typed comments. It will also allow users to do more without removing the headset.

So what does this mean for payments? Time will tell, but banks are already taking notice. At this year's Card Forum, hosted by SourceMedia in Austin, Sarah Wilkinson, RBC's senior manager of innovation strategy and communication, explained her interest in VR.

"Virtual reality is only a sandbox platform at the moment," she said, but it's also compelling.

When consumers "put on a virtual reality headset and get to experience a product ... [they] are much more willing to make that purchase," Wilkinson said. "They are much more engaged with it, they can see it, they can feel it."

New partnerships

PayPal's strategic partnership with Google has advanced to online shopping, as Android Pay users will soon have PayPal as a funding option for e-commerce.

The deal expands upon an agreement last month in which PayPal became an Android Pay option at the point of sale.

For PayPal, the new arrangements with Google and Android Pay continue a trend for the former eBay unit in creating partnerships that expand PayPal's exposure to more merchants.

The shift in PayPal's strategy kicked off midway through 2016 when the company established a working relationship with Visa in which PayPal would equally encourage its account holders to link to Visa cards as opposed to steering them only to checking accounts.