May 26, 2011
Google Unveils Mobile Wallet
Google Inc and four bank and telecommunications partners unveiled "Google Wallet" and "Google Offers" on Thursday, bringing US consumers a step closer to paying for products by simply waving their smartphones at the checkout counter.
The Internet search giant, at a press conference at its New York headquarters, said the new services are currently being trialed and will be available this summer. Financial partners Citibank and MasterCard and telecom partner Sprint were on hand for the unveiling.
If successful, the service will slice out a big piece of the market and bring US consumers closer toward the retail experience that already exists in Asia, where shoppers already routinely wield smartphones like they are credit cards.
The service is designed to work as an app on Android-powered phones. Google has signed up retailers including Macy's, American Eagle Outfitters, and Subway to participate in the service, and will offer loyalty programs and discount offers as well.
"It's an opportunity to redefine commerce and payments and usher in a new era of mobile commerce -- it's mobile, local, personalized, and open," said Stephanie Tilenius, Google's VP of commerce.
Mobile wallets are expected to face some hurdles in the United States, but since last year, some large companies have pushed to make the technology a reality.
While there has been talk of smart payment systems for years, Google will undoubtedly face the same trials and errors that previous stifled attempts have encountered.
Google Wallet will only connect to MasterCard PayPass terminals. There are currently more than 135,000 of those in US stores and restaurants, but that's only a small fraction of the total number of outlets countrywide.
If the service does launch this summer as slated to, it will beat out rival Isis to the mobile payment market in the US. Isis, a joint venture of Verizon Wireless, AT&T and T-Mobile USA, is expected to launch early next year. Sprint was the only top US carrier that didn't join the Isis venture.
Visa has also tested a pay-by-phone system with several large banks. The world's largest credit and debit card processing network has said it plans to make its mobile payments system commercially available this year.
"Today's announcement [by Google] is another early salvo in what will be a long and hard-fought battle to change consumers' payment behavior and, as a potential result, the makeup of the payments landscape," Forrester Research analyst Charles Golvin told Reuters.
The new service will allow shoppers to pay for purchases with a single tap of their phone, or a swipe, when near a payment terminal. But in a demonstration at Thursday's unveiling event in the Big Apple, a Google exec had to tap twice, then sign on the screen of the terminal to get the purchase to go through.
It is up to the retailer to decide if the shopper has to sign on the screen, said Osama Bedier, Google's vice president of payments. He said the mobile payments system is more secure than credit and debit cards with magnetic stripes, but Google apparently faces a challenge in convincing retailers and perhaps also consumers of that.
Customers will also be able to use a Google Prepaid card to make purchases. They will also be able to take advantage of Google Offers, the Mountain View, California-based company's online discount coupon program.
Tilenius described Google Wallet as the "next generation of mobile commerce."
"We're building an open commerce ecosystem that for the first time will make it possible for you to pay with an NFC wallet and redeem consumer promotions all in one tap, while shopping offline," Tilenius told AFP.
Google Wallet will also allow consumers to pay using gift cards and to redeem promotions, discounts and coupons.
"Google Wallet will start with offers, loyalty and gift cards but some day items like receipts, boarding passes and tickets will all be seamlessly synced to your Google Wallet," Google said in a blog post.
Besides the businesses participating in Google's new mobile wallet service, some Coca-Cola vending machines and taxi companies are also PayPass-enabled.
To read more on Google Wallet and Google Offers, and to learn about other offers included in the new services, go to http://www.google.com/wallet/.