On Sept. 19, Google launched its mobile-payment system, Google Wallet. The offering allows users to pay for products from their Google Nexus S after loading a credit card onto their Wallet app and tapping the device against a reader. The idea, Google says, is to make it easier for consumers to make purchases, as well as securely buy products without needing to search through a wallet to find plastic.
As the first major player to the market, there's a chance that Google Wallet will gain an early lead. Considering how lucrative mobile payments could eventually be for Google, it shouldn't surprise anyone if Google spends an inordinate amount of cash to solidify its position in the marketplace. But to say now thatGoogle Wallet will reign supreme in the mobile-payment business would be premature. In fact, there's a good possibility that Google Wallet won't dominate that space at all.
1. Consumers lack knowledge, experience
Unfortunately for Google and any other company thinking of competing in the mobile-payment business,there is a general lack of knowledge among consumers about how it all works. They hear buzzwords, like near-field communication, and they're unsure of what that all means. What's more, no company has really explained it to them. Until consumers fully understand mobile payments, no company can win out in that market-Google included.
2. Limited phone availability
For now, Google Wallet is available only to Google Nexus S owners. That device, which is running on Sprint's network, is by no means the most popular smartphone in the market, and since it's available only on one carrier's service, the vast majority of consumers won't even be able to run Google Wallet. Google says more devices will support Wallet in the future, but until that day comes don't expect its service to be too well-known outside certain circles.
3. All wireless carriers aren't onboard
In a blog post announcing Google Wallet on Sept. 19, Google said that it was "releasing the first version of the [Google Wallet] app to Sprint." For now, Verizon Wireless, AT&T and other carriers are not in partnership with Google. Andconsidering those firms reportedly have their own plans in the NFC market, they might not want to jump at the chance to support Wallet so quickly. Until wireless carriers jump on the Wallet bandwagon, the service won't be rapidly adopted in the market.
4. Apple might jump into the space
There is rampant speculation that Apple will bring an NFC chip to the iPhone 5. If it does so, the device could support Apple's own Google Wallet competitor. Such a platform could be a major force in the marketplace. After all, Apple has a boatload of customers who have their credit card information on file with iTunes. If it could find a way to use those for its own Wallet competitor, Google's service could be in for trouble.