Last week rumors surfaced that Google Inc. will introduce Android Pay, a new payments API to power in-store and in-app payments for third-party Android apps. In an announcement made yesterday at Mobile World Congress, taking place in Barcelona this week, Google SVP Sundar Pichai confirmed that Android Pay is a real project.

The Android Pay API is not a standalone mobile wallet app, but rather a platform that will let developers include mobile payment options in their Android apps. Google Wallet will remain the company’s mobile wallet app and will also make use of the Android Pay API.

Pichai did not provide in-depth details about how payments via apps using the Android Pay API would work, but did say it delivers features similar to those offered by competitors.

One such feature is “tokenization”, used by Apple Pay and a standard supported by credit card providers like Visa, MasterCard and Amercian Express. Tokenization protects consumer’s credit card data by generation a one-time token for each transaction that takes the place of credit card data.

This is the second announcement related to mobile payments from Google recently. Last week the company announced that it had acquired technology from rival Softcard to improve its Google Wallet app and, as part of the deal, the three carriers behind Softcard, AT&T, T-Mobile and Verizon, would preinstall Google Wallet on all Android phones sold by them going forward.

Rivalry in the mobile payments space is heating up significantly since Apple Pay rekindled interest in the space. Following its acquisition of LoopPay earlier this month, Samsung Electronics Co Ltd. on Sunday announced the launch of Samsung Pay in conjunction with its latest flagship smartphone, the Galaxy S6.

Also intensifying its effort to compete in the mobile wallet space, PayPal Inc. yesterday announced that it has agreed to purchase Paydiant Inc., a mobile payments company that provides technology that enables retailers to create their own branded mobile wallets. The acquisition is significant as Paydiant counts among its customers Merchant Customer Exchange (MCX), a joint venture between a group of large U.S. retailers led by Wal-Mart Stores Inc. to bring to market CurrentC, a merchant-owned mobile payment system.

Pichai did not say when the Android Pay API will be available, but we expect to learn more at the company’s I/O conference in May.

photo credit: Google Nexus 6 _ 36 via photopin (license)