Google Wallet is promising but will require serious consumer faith and change to see major adoption, industry analysts said. No wonder Google executives weren't cocky during the launch.
Following the spectacular failure of the over-hyped Google
Wave, executives for the search engine are painfully aware that just because they build a technology
they feel is cool and cutting edge, people may not flock to use it, analysts agreed.
That's a big reason why the executives leading the Google
Wallet mobile payment effort, which is launching in New York and San Francisco this summer, were careful not to call their shot a home run.
Google Wallet is to date the most comprehensive stab at
cracking the mobile payment code in the United States. Consumers must purchase Sprint Samsung Nexus S 4G smartphones,
which are equipped with Android 2.3 "Gingerbread" software, which has
native support for NFC (near field communications) wireless technology.
Nexus S 4G owners can then download the Google Wallet
application from the Android Market, and provision either a Citi MasterCard or
Google prepaid card to the app and the NFC chip on their phone. Consumers may then tap and pay for goods on special,
NFC-enabled point-of-sale terminals in more than 124,000 retailer stores that offer MasterCard's
PayPass service (311,000-plus worldwide).
Early retail partners for Google Wallet include Subway,
American Eagle, Radio Shack and Toys "R" Us. With Wallet available on
only one smartphone from the nation's third largest wireless carrier,
it's fair to ask
what the incentive is for using such a service.
Aside from the typical loyalty offers shoppers may accrue
from using Wallet at these locations, Google is pairing Wallet with Google
Offers, a Groupon-like local deals service. Consumers may scan coupons into
their smartphones and sync them to Google Wallet for redemption at the same
There is a lot to like about the service, and some
consumers may be ready to leave their physical wallets at home and pay by
phone. Still, it's not clear enough people are willing to try Google Wallet.
Omar Bedier, the vice president of payments who Google
(NASDAQ:GOOG) lured from PayPal to build Google Wallet, acknowledged mobile payments have
long faced the "chicken and egg problem of how many phones are there with
NFC and what can you do with them."
not convinced the mainstream consumer is ready for payments via their phones,"
industry analyst Jack Gold told eWEEK. "We consumers currently have so
many different options, it's getting overwhelming. I think the major issue
consumers will need to overcome is trust. It's not so much about the technology
as it is about who do I trust to be my credit authority. Is it Google? Is it
Gold's point, all credit card information is stored on the secure NFC
chip, which is designed to self destruct if someone toys with it. In
the event of a
lost phone, Google and its partners can deprovision all credit cards
Gold thinks Google Wallet may be limited to techie adoption, at least
United States and Europe. "For emerging markets where there might be
phone based payments might actually be popular. There is already a lot
of SMS-based payments going on, and even bank transfers via phone in