Google Wallet Needs to Change Customer Sentiment to Work
Current Analysis analyst Avi Greengart, who attended the Wallet and Offers launch event in New York May 26, said skepticism is warranted with Wallet. "The odds are stacked against any wide-ranging initiative like this - but I was actually impressed by Google Wallet, specifically because it is tied to Google Offers," Greengart told eWEEK. "All NFC initiatives face the chicken and egg problem: not enough NFC devices, not enough POS (point-of-sale) terminals that accept them."Google will collect the industry standard 50 percent cut of sales made via Offers and will make money from advertising on Offers. However, it will not take a cut of any Wallet transactions, which should keep banks and payment providers happy, Greengart said. "The only gatekeepers not fully on board are the carriers and handset vendors, who Google seems to think are ready to embrace this because consumers will want it," Greengart added. "We'll see." Indeed, while Sprint is on board for Google Wallet, Verizon Wireless, AT&T and T-Mobile have their own mobile payment plans in ISIS, the NFC-based platform they plan to launch with the support of multiple banks and payment services in 2012. Gartner analyst Alistair Newton said convincing customers to change (from switching to Google Wallet and other such services) will be difficult. The sweet spot for Wallet exists in the convergence of mobile payments and loyalty rewards, he said. Furthermore, Newton believes location will be a big factor with such services. For example, it's not enough to email users deals; deals providers need to target users who come in close proximity to their locations. For example, a consumer walks by a Starbucks and gets an email for a free coffee sent to their phone. That instant, proactive deal-making fosters loyalty. It's true mobile, local commerce. Stephanie Tilenius, vice president of commerce at Google, calls its Molo for short. Still, Tilenius said Google Wallet will take time to gain momentum, but "not as much time as you think." As a company, Google is under no illusion that there are challenges to pushing Wallet adoption into the mainstream.
However, Greengart said Wallet is the most exciting mobile payment rollout he's seen because Google Offers provides real incentives for consumers to use it. Researchers at BIA/Kelsey said U.S consumer spending on deal-a-day offers will grow from $873 million in 2010 to as much as $6 billion by 2015.