What’s in Google’s Wallet?
Google introduced Google Wallet, a contactless near field communication
(NFC) based cell phone payment platform, to much fanfare last week. The mobile
app for the Android operating system will not only allow consumers to wave
their cellphones at a retailer’s terminal to make a payment sans a credit card
but will also enable users to redeem special coupons and earn loyalty points.
a launch event in New York City, Google officials noted that 60 percent of
18-34 year-olds are comfortable using a mobile phone for payments. It also
displayed forecasts calling for half of smartphones to be NFC-enabled by 2014.
For its part, Google expects to earn money by making "Google
or advertising deals from local and online businesses — to consumers as they
shop. When shopping a store, an offer may be automatically factored into their
purchase. Users can also go to the web and find coupons and add them to their
digital wallet. Like Groupon, Google collects a fee from participating retailers
every time a coupon is redeemed.
Retailers will be able to put loyalty cards
and coupons in the Wallet, helping them track and engage customers. Credit
card companies collect the same fee as a traditional credit card transaction.
upon entering a store, consumers’ phones may serve up a list of
items they recently bought and offer related discounts, says Google. Eventually,
everything from boarding passes, tickets, ID and keys could be stored in the
this summer in New York City and San Francisco, the wallet will be available
on the Nexus S 4G phone on Sprint and be able to hold certain MasterCards issued
by Citibank. It will also hold a virtual Google Prepaid MasterCard.
challenge appears to be getting other cellular carriers, banks, credit card
issuers, payment networks and technology companies — many
developing competing services — to support the initiative.
an open commerce ecosystem, and we’re planning to develop APIs that will enable
integration with numerous partners," Google
said in its blog entry.
PayPal also immediately filed a lawsuit alleging intellectual
theft. Security and privacy concerns are other obvious hurdles that Google
says it has addressed. Public education may be required and some wondered whether
Google’s offers will be enough to incentivize consumers.
A Forrester Research
note, Google Wallet Is Not About Mobile Payments, speculated that the
lack of phones with NFC technology and the need to upgrade retail terminals
will slow adaption, according to the New York Times. But Forrester believes
consumers will need more incentives to sign up.
"Google’s vision of incorporating loyalty, coupons, and digital receipts
will add meaningful value for consumers but will also require significant integration
by merchants and their vendors," the report stated.
- Google reveals mobile payment plan – The Financial Times
- Google Unveils App for Paying With Phone – The New York Times
- Google unveils smartphone pay service, PayPal sues – The Wall Street
- Coming soon: make your phone your wallet – Google Blog Spot
- Google’s NFC Move Thursday–with Walgreens, Macy’s, Subway,
American Eagle — Goes Beyond Plastic – StorefrontBalktalk (subscription
- Waiting for the New Mobile Payments Frontier – The New York Times
- Google Wallet: The Debate Rages – PC World
Discussion Questions: Is the Google Wallet a good model for contactless payment services? What is your assessment of the challenges and opportunities in front of Google with this new service?