Here Comes Google After Your Wallet

Juniper_Innovations_Google_WalletGoogle have finally entered the mobile payments and NFC market by launching Google Wallet.  Using NFC devices, Google Wallet is aimed at replacing your actual wallet, allowing you to make purchases using your mobile phone.  Google’s market entry has been long awaited however its launch is not without controversy.

What do you need?

Google Wallet will support both Citi & MasterCard plus a Google Prepaid Card, which apparently you’ll be able to fund with almost any payment card.

To use Google Wallet however you need 3 other things:

  • Google Wallet app on your (Android only) mobile phone
  • A phone that is NFC ready i.e. this can be an NFC phone or a non-NFC phone that has a Google sticker, enabling mobile payments to be made via the Cloud
  • Stores that accept Google Wallet.  In the U.S. this includes American Eagle, Subway and Macy’s

Some of the major benefits of Google Wallet include:

  • Consumers can make store payments without credit cards and cash
  • Vendors can entice consumers to purchase using coupons i.e. the coupon is automatically applied when consumers make a purchase
  • Consumer’s phones can help manage budgets e.g. with spending and budget status reminders at point of purchase

So what does the future hold?

Currently, only Android phones can use Google Wallet.  If you compare this to Google maps which at one time was also platform restrictive, popularity drove Google to make the service more widely available and this could also be the case with Google Wallet.

Of course vendor take up is another issue as they require NFC readers.  Platform and phone independent devices however will encourage vendor participation.

So what is holding back a roll out?

Fraud risk – Malicious entrepreneurs could intercept data, mimic phones ID’s, produce false phones, or think up a number of other creative ways to take advantage of Google Wallet.  Unless banks can underwrite or insure the funds to protect against fraud, in a cost-effective manner for merchants,  then it is unlikely that retailers will switch to the technology any time soon.

Privacy – will Google be sharing data?  Is this an issue to slow down or stop adoption?  If Google are not expected to benefit from transaction payment sharing, where will they generate revenue?

Banks – as in Orange’s link up with Barclaycard in the UK will there be similar provider restrictions with Google?

..And the controversy?

Google is being pursued by eBay and its online payment unit PayPal which said Google and two executives stole its trade secrets for turning smartphones into digital wallets.

Let’s see what happens.  For certain, we’ve been blogging about NFC for months seeing it is a technology that is growing in popularity by plenty of businesses wanting to take advantage of it.