With technology changing so rapidly in the industry of Information and Communication Technologies, mobile payment systems are no longer new anymore. The future has been predicted where traditional wallets will be replaced by the virtual wallet and mobile phones will store the items you carry in your wallet. Many companies have already developed systems for mobile payments such as PayPal, Amazon Payments and, naturally enough Google is one of them.
Google announced the Google Wallet application in America on May 26th 2011 and the application was released on September 19, 2011. Google Wallet is a mobile payment system developed by Google that allows users to store credit cards, loyalty cards, gift cards and offers on their mobile phone. Basically, it will serve the purpose of your credit/debit card and make the payments easier by simply swiping or placing your phone near a terminal which are now available available in supermarkets, stores and shops and make a credit or cash transfer. Initially, Sprint’s Nexus S4G was the only phone that supported it, but as of April 2012, three other mobile devices are compatible with Google Wallet, which includes: Google’s own Nexus, the LG Viper 4G LTE and LG’s Optimus Elite. These phones employ Near Field Communication (NFC) to make secure payments, fast and convenient by simply placing the phone near any Pay-pass enabled terminal. NFC is a contactless, technology for smartphones to establish radio communication with each other by touching them together of by bringing in a close proximity, and in the near future it is expected to be common on most mobile phones, the way Bluetooth, GPS and Wi-Fi are today.
After the introduction of Google Wallet to the market, Google made the clear statement that it will partner with all the vendors of non-android phones including Apple, RIM and Microsoft. Its current partners include Citi bank as an issuing bank, MasterCard as the initial payment network and Sprint as a first mobile carrier. Some merchants are already accepting Google Wallet and it works at other participating MasterCard PayPass merchants such as 7- Eleven, Best Buy, McDonald’s, Office Max, The Home Depot , which are well known brands in the world.
Google Wallet and the Competitive Environment
The rising competition and security issues are a major concern for Google who wants now to be a dominant player in the mobile payments industry. It is not alone! The ISIS Mobile wallet is a major competitor to Google Wallet in the United States, with the backing of Verizon, AT&T and T Mobile, three major players in the industry of telecommunication it is going to be launched this summer. The future is unpredictable but the partnership of three major players is definitely set to give a tough competition to Google Wallet . Moreover, Isis can have competitive advantage because of its partnership with MasterCard, Visa, Discover and American Express whereas Google Wallet’s partnership is limited to MasterCard and Citi Bank.. In addition, there as been findings from security firm Zvelo that the Google Wallet pin code, which is required by users to make any kind of purchases can be easily cracked through exhaustive numerical search, which means that cyber criminals/ hackers could get access to the pin code and use it. Similarly, video blogs have been posted demonstrating security issues how prepaid card balance can be retrieved from a second hand or stolen phone. The security issues puts the Google Wallet in a shaky situation and that will make users reluctant to accept it until they are fully confident with the application.
Technology Adoption Curve and Future of Google Wallet
Comparing the Google Wallet to the popular Technology adoption curve, it is now in the first stage where the new product has just been introduced. The major challenge for Google Wallet is to capture the market of early adopters and cross the chasm to target the majority of the market. For that it is going to be dependent on building confidence and bringing aboard the right partners. Banking is all about trust. It has been a year since Google introduced Google wallet, now the question arises whether it will be well accepted in the mobile industry or whether the issues of security, increasing competition and lack of a global presence will hinder its success. There is no doubt about the future widespread use of mobile payment systems in near future, but whether Google Wallet will be able to capture a sizeable part of the market in the face of competitors such as Square, ISIS, Visa Wallet, and Serve by American Express remains to be seen.
References:
Official site of Google Wallet- http://www.google.com/wallet/
4 réponses à “Google Wallet – The future of mobile payment systems”
Google will really have to work hard to implement this service because, as you said in the article, they have to make people feel confident because having your wallet in a mobile phone has lots of risks.
On the other hand I think that this will make easier people’s lives because they don’t have to carry their phone and their wallet, you can have two in one!
It will be all the more difficult for people to trust Google, because Google will have access to their whole life: mail, private information and as of now, money. Concerns about Google are on the rise now that the two founders have been summoned before the Federal Trade Commission. Furthermore If some day Google goes bankrupt or is bought by another, (less trustworthy) corporation, who knows what they’ll be able to do with our information?
I agree with your point that it will be challenged whether Google can cross the chasm or not in order to be in the early adopter and early majority. I think it is very interesting point whether people will accept this new technology or not. How can they trust in terms of the security. For me, I would not give all my confidential details to Google. It sounds kind of risky for me. how can we be sure that Google will not sell our information?
I think with the new means of mobile payment:
– possibility to scan our credit card to pay (card.io)
– possibility to give an advance of money to the consumer allowing him to pay directly (PayPal),
the question of data security will become essential, more than with the simple mobile wallet. Another question is to know if consumers are really interested in these new means of payement.