Google is introducing a significant overhaul of its Google Pay application for both Android and iOS platforms today. Initially conceived as a straightforward digital substitute for traditional credit cards, similar to other contactless payment solutions, Google Pay – formerly known as Android Pay – has gradually expanded its capabilities. However, its fundamental purpose remained largely unchanged. Having reached approximately 150 million users across 30 countries after five years, Google is now enhancing the service with this update, preserving its essential functions while simultaneously shifting its focus towards comprehensive personal financial management, and offering potential savings opportunities.

Furthermore, Google is collaborating with 11 financial institutions to introduce a novel type of bank account in 2021, named Plex. These mobile-centric accounts will feature no monthly fees, overdraft penalties, or minimum balance requirements. While the banks will maintain ownership of the accounts, the Google Pay app will serve as the primary interface for their management. The initial launch partners for this initiative are Citi and Stanford Federal Credit Union.

“The new Google Pay app represents a convergence of three key elements,” explained Josh Woodward, Google’s Director of Product Management, during a demonstration of the updated application. “These elements are organized into three distinct tabs within the app: the ability to quickly send and receive money from friends and businesses; a platform for discovering offers and rewards to help you save money at various retailers; and tools for gaining insights into your spending habits, enabling you to effectively manage your finances.”

While facilitating payments to friends and businesses has always been a central function of Google Pay, the emphasis is now being refined. “You’ll observe that the entire product experience is centered around your relationships,” stated Caesar Sengupta, Google’s lead for Payments and Next Billion Users. “It moves away from extensive transaction lists and complex identifiers, instead prioritizing interactions with individuals, groups, and businesses.”

Consequently, the app’s most prominent feature is now peer-to-peer (P2P) payments. Users can still send and request funds as before, but the redesign simplifies tasks such as splitting restaurant bills with friends, or sharing rent and utility costs with roommates, and tracking who has already paid. Woodward noted that this feature was developed in response to user feedback identifying bill splitting as a common source of frustration.

Within this same view, users can also access a list of businesses with whom they have recently transacted, whether through Google Pay’s tap-and-pay functionality or by linking their credit cards or bank accounts. This allows for easy review of all recent transactions with those businesses.

Perhaps the most significant addition with this update is the ability to connect bank accounts and credit cards to Google Pay, enabling the app to gather information about your spending patterns. This functionality essentially integrates a simplified version of Mint into the Google Pay environment. This data aggregation is crucial for delivering many of the app’s new features. Google confirms it is working with “a number of different aggregators” to facilitate this feature, but has not disclosed specific partner details. It is important to note that, like all new features, this functionality is disabled by default and requires explicit user consent.

The underlying concept mirrors that of other personal finance aggregation tools. At its core, it provides a clear overview of your income and expenses. However, Google is also leveraging its technology to deliver insightful analyses of your spending behavior. For instance, it can display your weekend spending on Mondays.

“These insights are designed to be presented as narratives,” Woodward explained. “You can swipe through them to view your largest transactions, compare your weekly spending to typical levels, and analyze your expenditures with friends and the locations where you spent money in a specific month, such as November.”

This functionality also allows for effortless searching of transactions using Google’s search engine. During a demonstration, the team showcased how a search for ‘Turkish’ successfully located a transaction at a kebab restaurant, even without the word ‘Turkish’ appearing in the business name. Users who regularly photograph their receipts can now also search these images within Google Pay, pinpointing specific purchases, as well as accessing receipts and bills from their Gmail inbox.

Another new feature within Google Pay is the ability to discover and digitally clip coupons that are automatically linked to your credit card, providing cashback rewards on qualifying transactions without requiring any additional action. These offers can also be personalized if you choose to enable this option.

The development team has also collaborated with the Google Lens team to enable scanning of products and QR codes for potential discounts.

Regarding the core payment functionality, Google is introducing support for contactless payments at 30,000 gas stations, often accompanied by discounts. The participating partners include Shell, ExxonMobil, Phillips 66, 76, and Conoco.

Additionally, users will soon be able to pay for parking in over 400 cities directly within the app. This feature will initially launch in Austin, Boston, Minneapolis, and Washington, D.C., with further expansion planned.

While entrusting Google with your payment transactions is one matter, providing access to this extensive – and often sensitive – data is a different consideration. The team consistently emphasized that Google Pay will not sell your data to third parties or utilize it for ad targeting within the broader Google ecosystem. All personalized features are also disabled by default, and users are offered a three-month trial period to evaluate them before making a permanent decision.

Ultimately, the decision to utilize the optional features and share your data with Google is a personal one, and not everyone will be comfortable with it. However, the fundamental Google Pay features remain unchanged, allowing you to continue making NFC payments at the supermarket with your phone as before.