Due to security concerns, Android Pay won’t work with third-party lockscreens. Owners of rooted phones are also out of luck as Android Pay won’t work on such devices.
According to a Google engineer, “Google is absolutely committed to keeping Android open and that means encouraging developer builds. While the platform can and should continue to thrive as a developer-friendly environment, there are a handful of applications (that are not part of the platform) where we have to ensure that the security model of Android is intact.”
He further explained that this “ensuring” process is done through the SafetyNet API, and basically what happens is that Android devices need to pass a compatibility test suite first before it allows Android Pay to work.
He notes that this is different from how Google Wallet used to work in which Wallet had the ability to independently evaluate the risk of the transaction.