Alphabet Shares Rise On Google Pay Debut: Should Apple Be Worried?

Shares of Alphabet Inc. GOOGL gained more than 1.3% in morning trading Tuesday as the technology behemoth celebrated the launch of Google Pay, the company's latest response to Apple's AAPL popular mobile payment platform.

In short, Google Pay is one of a growing number of options that let users pay for goods with their smartphones. This new iteration follows several failed attempts by Alphabet to launch such a platform, including Google Wallet and Android Pay.

Google Wallet was the search giant's first foray into this market before it was folded and transformed into Android Pay. Now, Google Pay promises to combine features from both—such as the ability to pay at checkout counters using a phone and the option to scan into certain public transit systems.

Alphabet has also said that Google Pay users will be able to send money to one another using its new "Google Pay Send" platform, which is slated to launch within the coming months. This feature mimics several popular money-sending applications, including PayPal's PYPL Venmo and Square's SQ Cash App. Google Pay Send is also a copy of Apple's newly-launched Apple Pay Cash.

At the end of the day, Alphabet's new mobile payment offerings are a direct response to Apple's progress in the market. Apple Pay has exploded in popularity over the past few years, thanks in large part to its integration on iPhones.

But Alphabet is certainly no smartphone slouch, and over the next few days, Google Pay will reach all Android-enabled smartphones around the world—meaning that the platform is a serious contender in terms of exposure.

But will Google Play catch on?

Alphabet's frequent rebranding of its payments platform seems to imply that previous iterations have not resonated with users. However, a quick glance at Google Pay's debut features does not necessarily reveal anything particularly new that could provide a spark.

Alphabet said that it is currently working with partners to ensure that Google Pay users will be able to use the new platform to shop for goods online or by using Google Assistant, but right out of the box, the Google Pay launch appears to be more of a name change than a reimagining.

One also has to consider whether Apple Pay and Google Pay are even really competing for the same users. Is a preference for a specific mobile payment platform really going to be enough to sway someone who is on the fence about going for an Android or an iPhone?

If anything, the launch of Google Pay reaffirms the hype around mobile payments and suggests that these platforms will continue to be a focus for tech companies going forward.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report