Android Pay, unveiled at the Google developers conference in San Francisco, brings together mobile carriers, payment networks, banks and retailers to allow smartphone users to use their handsets instead of payment cards.

Google engineering vice president Dave Burke said Android Pay would work in more than 700,000 US retail outlets that accept contactless payments.

Similar to the Apple Pay system unveiled last year, Android Pay will allow consumers to store credit card information on their handsets along with loyalty cards and other data.

For extra security, Android Pay will generate a one-time 'token' or virtual account number so the actual credit card data is not revealed in a transaction.

Users can simply and safely use their Android phone to pay in stores where you see an Android Pay logo. This will allow Google Wallet to become a pre-installed 'tap to pay' app on Android smartphones.