The “tap and go” system lets users of Android smartphones - including those made by HTC, Samsung, Sony and Huawei - store a digital version of their debit or credit card on their device.
They pay for items by tapping it against a contactless card point, including in high street stores and on the London transport system.
The system rivals Apple Pay, which was launched by the iPhone maker in the UK in July last year.
Most of the major UK banks have signed up for the Android system from launch day, so holders of an eligible Visa or MasterCard at Bank of Scotland, First Direct, Halifax, HSBC, Lloyds Bank, M&S Bank, MBNA and Nationwide Building Society can now use Android Pay. Google has confirmed more banks will be added in the future.
An Android Pay app has been launched to help users set up and manage their transactions. The payment system can also be used within certain apps as a form of payment, including Ticketmaster, Uber and Domino’s Pizza.
Android Pay enables users to make transactions of up to £30 without unlocking their phone, while payments of more than £30 can be completed by confirming using a fingerprint or pin entry.
All transactions are encrypted for additional security, with specially generated digital tokens used instead of real card details when a purchase is made, to protect personal information.
Pali Bhat, Google’s senior director of product management, said: “Security is at the centre of Android Pay. With industry standard tokenisation, Android Pay doesn’t send merchants your real card number when you purchase.
“Android Pay also makes it convenient to keep track of payments and to lock your device if it becomes lost or stolen.”
The system will work on any Android smartphone with near-field communication (NFC) technology built in and at least version 4.4 of the Android operating system. This means most Android devices released in the last two years are compatible.