Is Google Wallet What Mobile Payments Need to Succeed?
By Mark HachmanContents
- Is Google Wallet What Mobile Payments Need to Succeed?
- Who's In, Who's Out - and Why
- The Big Prize: the U.S. Soldier
Could Google Wallet finally give the boost that virtual wallets need to succeed within the United States?
Analysts say yes - but only if payment processors, merchants, and developers like Google work together and facilitate the experience, even if some solutions compete with one another.
Two analysts even used the same analogy: just like consumers carry a single physical wallet, don't expect consumers to want to deal with multiple virtual wallets, as well. "Whoever gets the most traction will end up winning," said Chetan Sharma, an independent wireless consultant.
Launched in beta Thursday, 'Google Wallet' is a free Android app that securely stores multiple credit cards, or a Google prepaid card linked to your credit card (one that Google provides). When opened on an NFC-enabled smartphone, you can tap your phone against a supported payment reader and the item you want to purchase is instantly charged to your credit card.
Field tests are already in place in New York and San Francisco, but when it launches commercially this summer Google Wallet will work on Sprint's Nexus S 4G, MasterCard credit cards issued by Citi, and at retailers equipped with MasterCard's PayPass terminals. The transactions will be processed by First Data, an Atlanta-based company.
"Your phone will be your wallet. Just tap, pay, and save," said Stephanie Tilenius, Google's vice president of commerce, announcing the platform at the Google Partner event in New York. (Go hands-on with Google Wallet, here.)
NFC payment processing began quietly entering the American consciousness in 2002, when MasterCard debuted its PayPass terminals; today, more than 144,000 locations in the U.S. and over 311,000 locations worldwide use the PayPass system, according to MasterCard. NFC technology has greater visibility in the United Kingdom, where "chip-and-PIN" payments have been in place for years, and "tap-and-pay" NFC devices will be installed in Tesco supermarkets and McDonalds, according to a report.
"To be honest, I hate to say it, but I think it could be a kind of catalytic event [for NFC]," said Nick Holland, a mobile transactions and security analyst for The Yankee Group. "It could be very big, if people can play nice...If they keep the perspective of the consumer and the consumer experience, it could work out."
"It's theirs to mess up," Holland said, of the opportunity for Google.
Who will join the party?
At its launch, Google spoke often about "openness," according to analysts. But history has proven that invitations to join a consortium are not always met with reciprocal affection.
Visa, for example, launched its own digital wallet on May 11, which will roll out in the U.S. and Canada this fall. And Visa itself has designed its wallet to be globally interoperable, executives said. (Next: Who's in, who's out of the NFC game - including Apple.)
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