Google, Apple Joust for Mobile Payments via Android, iPhone

By Clint Boulton  |  Posted 2010-08-21

Google, Apple Joust for Mobile Payments via Android, iPhone

Google and Apple are both making moves to ensure smooth financial transactions on their mobile platforms.

Last week news bubbled up that Google and PayPal were brokering a deal to let the search engine use the e-commerce service as a payment option for applications purchased through Google's Android Market.

Apple, meanwhile, hired an expert in near field communication (NFC) technology as its new product manager for mobile commerce and has published a number of NFC-related patents in recent months.

Google's e-commerce infrastructure is poor compared with that of Apple. Users may only purchase applications for their Android smartphones from the Android Market in 13 countries.

By way of comparison, consumers may purchase apps from iPhone's App Store in 90 countries all over the world. PayPal would be a welcome addition to Google Checkout and credit cards as payment options in the Android Market.

Marianne Wolk of Susquehanna Research said that in the near term, such as move would bolster an Android Market suffering from a paucity of payment options and coverage. Long term, Google could leverage PayPal to sell other digital goods, such as books, music and video.

"PayPal would bring the Android marketplace a sizable user base of 87 million registered accounts, as well as incremental support for direct bank account debit or money orders," Wolk said.

"By integrating PayPal more tightly with Android, it could enable one-click purchasing that is more comparable to the Apple app store, which would facilitate greater usage."

Gartner has said the market for mobile apps will be $6.2 billion this year, making it an obvious sector for Google and Apple to attack with gusto.

Analysts Discuss Why Mobile Payments Are Big


"Mobile payments have been a stagnant technology," Gartner analyst Ken Dulaney told eWEEK. "I am sure that both parties see this as something that needs to be solved and see it as a challenge and future battleground."

In hiring Benjamin Vigier to head its mobile commerce efforts, Apple demonstrated that it may be ready to make its popular iPhone smartphone an electronic wallet of sorts.

NFC technology would allow users to call up a bar code on their smartphone screen and swipe it across a checkout scanner. One swipe, one purchase. Done.

"The goal is to replace the credit card with the phone eventually, and that has a number of advantages from the standpoint of preventing identity theft and allowing people to better manage and protect their credit because a phone is more difficult to compromise than a credit card is," industry analyst Rob Enderle told eWEEK.

If it's such a no-brainer, why aren't Apple, Google and their smartphone rivals Microsoft, Nokia and RIM doing this already?

"The problem is the banks and carriers are at odds at how they should be doing this and the banks own the current ecosystem, so making this move hasn't been easy," Enderle added. 

Even so, there are a number of players aggressively going after this space because of the great financial potential, not the least of which would be to make more consumers buy smartphones.

Why wouldn't people put aside their leather billfolds and wallets to be able to pay for clothes or groceries with their phones?

"No one vendor could allow another to significantly lead in this area," Enderle said. "Between Apple and Google, I'd give Google the edge particularly if they hooked up with PayPal, but it clearly is anyone's game at the moment." 


Rocket Fuel