Google announced the launch of two new mobile commerce services that the company says will revolutionize the consumer shopping experience.
Dubbed ‘Google Wallet’ and ‘Google Offers,’ the new Android apps will work together to enable customers to pay for goods, use their loyalty cards and redeem coupons all in a single tap at the point of sale, said Stephanie Tilenius, Google’s vice president of commerce at the launch event.
The Wallet app stores multiple payment cards, including a new prepaid Google card that the customer can use to make contactless payments at the point of sale. Offers is a marketing program that lets users redeem digital coupons culled from the Net or nabbed from NFC posters.
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One question to those that believe that Google wallet will work in it's current form.... How many different systems will a merchant pay for at the register? One for Google Wallet One for Isis One for Visa One for Microsoft One for Apple One for EMV card systems, one for MSD systems The list goes on and on.
Answer: Merchants will incorporate one new system if they are convinced that it will work with all cards. Remember how proud MasterCard was that they have 130,000 merchant terminals that accept RFID cards. That's 130K out of 4,000,000 in the US (the total may be even higher), or about 3%.
All the NFC deployments are going to piggyback off the existing contactless payment infrastructure in place. So even though CVS has the AmEx readers you can still use a contactless MasterCard or Visa.
Google Wallet is using MasterCard PayPass, which is the same as the other contactless payment schemes in the U.S. All a merchant has to do is decide to deploy a contactless terminal and it should work.
I do like the holoistic view of Google on the whole payment process, althrough it makes me feel creepy that they are getting more and more personal data.
Choosing Sprint as a partner in this case is a wise decision, as it is a CDMA carrier and therefore there is no SIM card involved. I'm really curious about the other MNOs and how they are dealing with the Google Wallet on the embedded secure element.
This is not much different from the existing magcard emv infrastructure. except that you can use your mobile phone instead of a card. Cards will still be around for a long long time (as mentioned by taggo.me founder)
The companies that will benefit from this are the terminal developers (hypercom etc) and the POS hardware vendors/developers who stand to sell more upgrades.
Should the merchants want to sign up with Googles solution they might have to agree to share their customer loyalty data. Even the consumers would have to agree on sharing their data.
I am all for this and love new technology. There are challanges ahead and there are many vendors wanting a share of this pie. The biggest will still survive, there will be mergers and some will try and fail. The investments for this platform is huge and only players with deep deep pocket can stay afloat.
The payment solution vendor with the most NFC RFID readers out in the market will be market leader. The big question is how do you do this fast while maintaining margins and profitability ? Do you pump the market with free RFID and NFC terminals and give merchants free transaction fees just to gain market share? or do you just hard sell the traditional way and hope merchants will pay for it ?
Banks are signing agreements with new NFC RFID paymet gateways as they see this as another way of earning income instead of sharing it with their traditional payment solution partners. But they will still maintain close and warm relationships with existing card vendors.
My vision is that we will still see the master visa card , amex, jcb stickers on merchant windows..but there will be new stickers there Facebook places, and Google Wallet and soon...Apples Wallet....and who knows..Microsoft Wallet ? and why not Pay Pal whilst they are at it...all wanting the brink and motar share.