Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Cloud
    • Cloud
    • IT Management
    • Storage

    Google Wallet Play Fraught with Skepticism

    By
    Clint Boulton
    -
    May 29, 2011
    Share
    Facebook
    Twitter
    Linkedin

      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 PayPass locations.

      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.”

      Analysts agree.

      “I’m 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 the carrier?”

      To 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 stored on the chip.

      Still, Gold thinks Google Wallet may be limited to techie adoption, at least in the United States and Europe. “For emerging markets where there might be fewer options, 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 emerging markets.”

      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.”

      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.

      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.

      Clint Boulton

      MOST POPULAR ARTICLES

      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Big Data and Analytics

      Alteryx’s Suresh Vittal on the Democratization of...

      James Maguire - May 31, 2022 0
      I spoke with Suresh Vittal, Chief Product Officer at Alteryx, about the industry mega-shift toward making data analytics tools accessible to a company’s complete...
      Read more
      Big Data and Analytics

      GoodData CEO Roman Stanek on Business Intelligence...

      James Maguire - May 4, 2022 0
      I spoke with Roman Stanek, CEO of GoodData, about business intelligence, data as a service, and the frustration that many executives have with data...
      Read more
      Applications

      Cisco’s Thimaya Subaiya on Customer Experience in...

      James Maguire - May 10, 2022 0
      I spoke with Thimaya Subaiya, SVP and GM of Global Customer Experience at Cisco, about the factors that create good customer experience – and...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×