Google Pay is the umbrella term of all Google's digital payment features. It came from the merger of Google Wallet (launched in 2011) Android Pay (launched in 2015) in 2018.
Currently, Google Pay is supported by all Android devices with operating system 5.0 (Lollipop) & above and iOS 12.0 or later. The app is also compatible with Android Wear 2.0 smartwatch.
Like any other mobile payment apps, Google Pay or G-Pay allows you to store your credit or debit card information so that you can make in-store, in-app, online, or in-person contactless purchases on mobile devices such as smartphones, tablets, or smartwatches. It also allows you to send money to your friends.
The payment app aims to be a one-stop-shop for all your everyday financial management needs, from contactless payment to budgeting to splitting restaurant bills to getting cash-back offers and more.
You don't need to bring your physical wallet or carry cards to make purchases. All you need is to download the app, sign in to your Google account, and select a preferred method of payment.
Google Pay now has around 150 million users in 30 countries.
Let's get to know its features, new additions, and its pros and cons.
Google Pay lets you store not just your credit cards or debit cards, you can load loyalty cards, gift cards, bank accounts, coupons, campus IDs, movie tickets, boarding passes, event tickets, and even public transportation tickets, all in one place.
The great offer of e-wallets by Google Pay is that you can avoid the hassle of carrying the cards, passes, or tickets in your physical wallet and also avoid fumbling through your wallet or purse to reach for them. You don't have to worry about leaving them behind at home once you load a scanned copy on your phone.
Google Pay uses Near Field Communication (NFC) technology or tap-to-pay to transmit your card information at any contactless payment terminal. You can unlock your phone using your fingerprint or your security passcode to pay without opening the app itself.
You can also use it for making in-app and online purchases.
Google Pay P2P Payment service allows you to send/request and receive to and from other Google Pay users. Unlike other digital wallets, the money received is directly deposited into your bank accounts.
You can transfer money directly from your checking account or pay from your Google Pay balance. You will have to deposit the money to your Google Pay balance from your checking account, debit/credit card (there will be fees for this transaction), or other payment methods that are supported by Google Pay.
If you tap on any of your contacts in the app, the transaction history between the two of you is shown as a chat-like view. You can also create a group where multiple people can send and request money from each other or split a bill or rent among the members. It tracks who has or hasn't paid their share and lets you tap a button to remind them of the payment.
Google Pay is on a partnership haul with international money transfer companies such as Western Union and Wise to support international money transfers. The P2P international money transfers are operational corridors such as India. India is the highest recipient of remittances in the world and one of Google Pay's biggest markets.
To open the app or make a payment, Google Pay requires authentication such as fingerprint ID, pin or pattern, so that only you can have access to your account.
Google Pay uses a tokenization system to provide an additional layer of security against fraudulent transactions. The app hides your debit card or credit card number and instead it is replaced with a randomly generated virtual account number or tokens during any transactions. Your data is encrypted to provide protection whenever you pay online.
Google Pay also sends you alerts when you are sending money to someone, not on your contact list.
In case your phone is stolen or lost, you can remotely lock it using Google's Find My Device service.
Cash Back Offers
The "Explore" section in the app helps you locate cashback offers. The vendors are shown in a long list. To use any of the offers, tap "activate" and claim it by paying with the linked credit card or debit card.
If you have a rewards card or store loyalty card for a given store, Google Pay can link it with that store. Retailers can share the offers in chat-form apart from seeing them in the "Explore" tab.
The cash-back rewards are real money and will go into your Google Pay balance. You can transfer the money into your bank account if needed. Depending on the vendors, the cashback rewards are usually credited within 5 business days.
If you want to personalize your experience within the app, you can turn on "Personalization" to allow Google's algorithms to use your transactions history, forms of payment, and loyalty cards to curate and aggregate deals and offers for you. This is not a default setting. You can try it for a 3-month 'trial' to see if you like it. You can opt out at the end of 3 months and return to only generic offers.
Google also lets you know that your data will not be sold to third parties or shared with the retailers. If you do end up using the offers, the concerned retailers will know about the transactions. Your translation data will also not be shared with the rest of Google to use for targeting ads.
Google Pay provides you a list of your transactions so that you can track your spending. The "Insights" tab will show you reports of your spending, saving, even upcoming bills.
It works by scanning through your transactions. If you share your Gmail account and Google Photos account, Google Pay will automatically scan for receipts in both. With Google Photos, it uses Optical Character Recognition (OCR) to read receipts automatically and link them with the correct transaction.
It works with checking accounts, savings accounts, credit cards, and debit cards.
It also lets you view all transactions with a particular merchant. You can search the merchant by name and see the list of all transactions with the merchant.
While the insights are useful, it lacks the true budgeting tools that are provided by budgeting apps like Mint or Simplifi. Google Pay only displays the information and may not help with cutting expenses compared to other apps dedicated for the same.
The app is free to download. There are no charges for sending and receiving money in your Google Pay balance. However, as of January 2021, there is a 1.5% fee ( a minimum of 31 cents) for debit card transfers (into or out of the Google Pay balance).
Since debit card transactions are considered instant, there will be a fee whereas there are no charges for bank account transfers as it takes 1-3 business days.
This can be a downside for Google Pay users as other P2P apps such as Venmo don't have fees for debit card transactions. And for international money transfers, fees by the partner companies like Western Union and Wise will be applicable. To save money on international money transfers, always compare before sending money.
You can order takeout or food at over 100,000 restaurants, buy gas at over 30,000 gas stations or pay for parking in over 400 cities using Google Pay. If you turn on your GPS, Google Pay lets you search for gas stations near you, along with prices. This is a handy tool to use during road trips.
Furthermore, if you refer friends to download Google Pay via text and your friend downloads and makes a purchase, you and your friend will get cash rewards that will be deposited into your Google Pay balance. (This can be a time-bound offer).
Upcoming Feature: Plex
Google is launching Plex, a new mobile-first bank account this year. Google has teamed up with 11 banks and credit unions, including minority-owned depository banks, in the U.S. to offer Plex accounts in Google Pay.
Essentially, some banks will use Google Pay as their banking app. You can handle basic checking and savings accounts with no monthly fees, overdraft charges, or minimum balance requirements and also get access to money management features such as "Goals" in the app.
For the time being, you can add yourself to the waitlist on the app to apply for a Plex account from Citi or SFCU.
It seems Google is betting on the advantage of having everything in one place. It is an ambitious undertaking with a wide range of features to help manage your money with ease and safety.
Google Pay is a good option if you wish to have mobile payment, cards, money management features in one single app.
For the time being, the several features still lack in value when compared to other stand-alone apps for budgeting, cash-back offers, and P2P payment services available in the market. We hope to see new features and more countries being covered under their international money transfer portfolio with continuing updates.