Android Pay’s debut means Google Wallet will live on as a P2P payments app

Google yesterday announced Android Pay, a new payment feature coming to Android 4.4 KitKat and above. It’s supposed to be the successor to Google Wallet, but the company also announced yesterday that Google Wallet would be relaunching for both Android and iOS. We talked to Google spokesperson Anaik Weid to explain how these two will coexist.

Here’s the short story. Android Pay will be for users to make online, in-app, and retail purchases using their Android device. Google Wallet will be for friends and family with a U.S. debit card to send money using their Android and iOS device.

Here’s where it gets confusing. All current Google Wallet users will be upgraded to Android Pay. Weid explained that a future update will essentially replace the Google Wallet app with the Android Pay app.

This is slated to occur after Android Pay launches with Android M later this year. Because Android Pay depends on your Google account, all your credit and debit cards will be pulled in from there.

Users interested in the new Google Wallet app will have to download the new version. You will be to send money received with the app directly to your bank account or spend it in stores using the Google Wallet card.

Why exactly Google chose to do it this way isn’t clear. Our guess is the company wanted a way to differentiate between payment features offered to just Android users and those to Google users in general.

Because mobile payments are still very much a new type of system, at least in the West, this may all end up changing again. Google isn’t the only player in the game, and we can expect new entrants to join as well. Competition and infrastructure may influence Google and others to tweak their strategies, but for now the company’s strategy relies on both Android Pay and Google Wallet.