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Grow Your Business Technology

The Small Business Guide to Google Pay

image for interstid / Getty Images
interstid / Getty Images
  • Google Pay is a payment processing service available to online and storefront businesses. Android users can download the Google Pay app on their devices and store their payment information digitally.
  • Google Pay is accepted by vendors who work both online and at stores. In-person transactions must be made through an NFC-ready terminal.
  • Google Pay offers several convenient features besides a virtual wallet. Users can also store passes and tickets on the app until they are ready to use them.

Launched in early 2018, Google Pay is the consolidated platform that brings together Android Pay, Google Wallet and Chrome's payment info features into one brand. Consumers can link their debit and credit cards to their Google accounts, like millions already have, and use their accounts as a payment option for both online and in-store purchases. Users can also use the app to transfer money to each other.

As with Android Pay, you can give customers the option of paying at the counter with their Android phones using contactless near-field communication technology installed on their phone and your card reader. To accept Google Pay transactions at your register, you'll need an NFC-enabled reader and a compatible POS system. Fortunately, most major POS systems and hardware providers are Google Pay partners. If you're already set up to accept Android Pay, there's no need to change or upgrade anything – for in-store transactions, it's essentially just a name change.

Google Pay can be implemented into your online stores for both desktop and mobile. In your online checkout, customers can simply click a big "buy with Google Pay" button you'll add to your website. For customers, this is a major convenience, as it's just a one-click process for them instead of entering their payment information. They just need to save their information with one source rather than with all the online stores they frequent.

You can program the service to your online store through the Google Pay API yourself. You need to apply for a Google Merchant ID and be approved by Google to implement the Google Pay API. This requires a bit of coding knowledge, though, so if you're not comfortable working directly with the API, you can find online POS services that come integrated with Google Pay, including major ones like Shopify, Checkout.com and Stripe.

You can find a full list of partners for in-store and online implementation here.

While providing a convenient way for your customers to check out either with their phones or online with their Google accounts, Google Pay has added several more features to incentivize your customers to keep coming back.

Google Pay can store your business's reward cards or loyalty program so your customers can automatically add or spend reward points when they check out with Google Pay. The same goes for gift cards, with customers able to track their balance and use gift cards as a payment method at checkout. If a customer has a physical reward or gift card, they can easily add it to their Google Pay account by either scanning it in with their phone or inputting the card number. This makes participating in your loyalty program and taking advantage of offers much more convenient for customers, resulting in more repeat customers who won't have to carry multiple cards and coupons everywhere with them.

Google Pay has a feature that allows users to locate nearby businesses that accept Google Pay. If your business is a member of Google Pay and appears on Google Maps, your store will appear on this list as well.

This is a specialty feature that applies to relatively few businesses, but a powerful one. If your business sells event tickets or transportation passes, the Google Pay API can be customized to store these tickets on your customers' phones. Customers can then show their tickets with barcodes on their screen for scanning.

Google Pay can be used to send and accept commercial payments. For example, you can use it to collect rent or payment for service. Keep in mind that you'll have to fill out a W-9 tax form if your yearly transactions come to more than 200 or amount to more than $20,000 in gross receipts.

Google Pay does not charge a direct fee to merchants. However, you will need to install certain hardware to process Google Pay at your location. All terminals must be able to support contactless transactions. The terminal must also be NFC-ready. Buyers can then use their mobile devices to pay for any transactions at your store. They can also make payments online through Google Pay.

Although Google Pay doesn't charge any merchant fees, credit card companies will charge any applicable transaction fees. Fees vary by the type of transaction. For instance, if the buyer uses Google Pay in store, it is considered a card-present transaction. Online transactions through Google Pay are card-not-present transactions. Credit card transaction fees range from 2.87% to 4.35%, according to Square. Transactions that the credit card processor considers higher risks are subject to higher processing fees. [If you're still looking for a processor, consult our reviews of the best credit card processing companies.]

Business News Daily Editor

Business News Daily was founded in 2010 as a resource for small business owners at all stages of their entrepreneurial journey. Our site is focused exclusively on giving small business advice, tutorials and insider insights. Business News Daily is owned by Business.com.