Google Pay Review: How Does Google Pay Work?

Digital payment methods like PayPal have been around for a while, and more keep coming. You may already be using Venmo, Cash App and Apple Pay, but Google Pay—formerly Google Wallet—is another interesting alternative. We’ll cover the basics of what Google Pay is, what it has to offer and what you need to know before you start using it.

What Is Google Pay?

Google originally had Google Wallet, which was a way to make online purchases. You could upload all your credit and debit cards into Google Wallet, allowing you to easily switch between cards when you made purchases online.

In 2018, Google decided to restructure some of its consumer financial products and launched Google Pay, which was a combination of Google Wallet and Android Pay. Google Pay offers the same card library feature as Google Wallet, but comes with some added benefits and functionality.

How Does Google Pay Work?

Google Pay is an app available on the Google Play Store. Once you download it on your phone, you can use it to:

• Send and receive payments from friends and family
• Pay for online purchases
• Make contactless payments from your phone
• View account balances and spending histories
• Get special cashback rewards via promotions

Is Google Pay Free?

Yes, Google Pay is free to download and use. All you have to do is download the app from the Play Store and set it up with your information. It also doesn't charge any fees for purchases or other transactions made through the app.

Google Pay Features

Google Pay has much of the same functionality that other digital payment apps provide, but it also has some specific features that are worth a special mention.

• Easy person-to-person transfers. Google Pay lets you create groups to send money for specific things, such as shared expenses for parents or roommates. It breaks down the total into each person's part for easy math, and there are no fees.
• Contactless in-person payments. If your merchant accepts it, you can use your phone to pay for gas, food or other items. All you have to do is open the app and hold the phone up to the transmitter at the point-of-sale and the payment is sent through automatically.
• Locate Google Pay merchants from the app. If you're in an unfamiliar place and not sure which businesses accept Google Pay, you can find the nearest place through the app.
• Cashback rewards. It's possible to earn money using the Google Pay app through its cashback program for special offers and tasks, such as referring friends and family.

Benefits of Google Pay

Digital payments have their place, and Google Pay is a great option for some. Here are a few of the benefits you can enjoy when you use this payment method:

• A slimmer wallet. Google Pay lets you carry all of your cards electronically, so you might not have to carry the physical cards with you. 
• Protection against potential credit card theft. If you don't have your cards on you, you can't lose them if you leave your wallet or purse somewhere and they can't be stolen.
• Harder to hack. Using electronic payments keeps your card information away from skimmers and other devices that scammers use to swipe your credit card info.
• Easily split bills and share expenses. Being able to send your friend your part of the dinner bill immediately cuts back on IOUs and makes it easier to split other shared expenses.

Pitfalls to Be Aware Of

While digital payment methods like Google Pay are becoming increasingly common, that doesn't mean they don't still have some disadvantages. Here are some things to consider before you make the switch:

• Not all places accept Google Pay. Many brick-and-mortar stores and even some online merchants still don't accept digital payments or may not accept Google Pay specifically. This can be a big inconvenience if you don't have your card with you to physically swipe.
• Your friends may use another payment app. If you want to send your nephew some birthday cash but he only has Cash App, being on Google Pay doesn't help. You can have more than one option, but this defeats some of the purpose behind the streamlining Google Wallet started with.
• It's still not completely secure. No payment option can offer complete security, but online and digital options may be more vulnerable to things like data breaches or hacking attempts.

Other Options to Consider

Google Pay isn't the only mobile payment option out there, and it's often a good idea to have a few in your phone in case the person or business you're trying to interact with doesn't accept it. Venmo and Cash App work very similarly to Google Pay. However, Venmo charges fees for some payments and neither of these options have the same purchase protection as Google Pay or PayPal.   

Physical cards are also always an option, but it might be easy to overspend when you're not seeing the balance right then and there. If you are interested in keeping a few physical credit cards handy, keep an eye on your credit and find great credit card offers through ExtraCredit.

Is Google Safer Than PayPal?

While Google Pay is considered a safe, secure payment method and financial tool, it doesn't have the same longevity as PayPal as far as reputation and customer service. However, it does have options to dispute and cancel purchases which makes it a decent alternative to PayPal if you're looking for something else.

If you're ready to jump into the digital payment world or just want to add another app to your payment repertoire, Google Pay could be a solid option.