Google Wallet brings Mobile / NFC Payments to the Masses

The world of ’finance’ has up until now seen 6 essential step changes in how people have consumed / exchanged goods and essentials:

• Simple Barter - 6-8 sheep exhanged for 1 cow etc.
• Account - Ledger system where Incoming / Outgoing values are recorded in written form
• Precious Metal Coins - Money where coins carry their own value
• Paper Money - Proxy payments / promissory notes usually based on state bank / national / international currency
• Credit Card - Electronic transfer of funds with physical counterpart
• Electronic Payment - Electronic transfer of funds with no physical counterpart

Electronic Wallets are really just another ehancement of the electronic funds transfer system - as you will still be transferring funds electronically, you just won’t have to carry a wallet full of plastic to back up such transactions any more. Payment via Mobile Phone is often called Mobile Commerce or MCommerce.

Most Londoners are already quite familiar with NFC payments by way of the ’Oyster Card’ which is used to pay for public transport / travel such as the Tube and Buses. Some years ago, Barclaycard introduced its own standard of NFC payment - the ’Wave’ system, which is now standard on all its payment cards; at one point you could even get a combined Wave / Oyster Credit Card - known as the Barclaycard OnePulse.

Over in Japan, Near Field Communication Payment has long since moved from credit cards and onto personal mobile phones - after all it’s just the smart chip that contains the technology. Many / most Japanese now swipe their phones to access the various Japanese public transport systems.

There are 2 factors that control the rate of adoption of this kind of new technology - the availability of systems and devices obviously, but also the number of retailers who decide to make use of this standard. In the UK, apart from public transport, NFC payment is largely restricted to just a few fast food restaurants and cinemas thus far.

Google’s partnerships with First Data, MasterCard, Citibank and Sprint are not just about NFC payments though. The Google Wallet solution is envisaged to cover a range of financial services, as well as domestic uses, including the following:

• Swipe / Bump payments - Standard NFC Payments
• Credit Card Wallet - All your Credit Cards in one place in electronic format - you simply switch payment providers as you wish
• Loyalty / Point Cards - Nectar Points, Airmiles and Store Loyalty cards all instantly updated and seamlessly transacted
• Electronic Ticketing - Various airlines already utilise Mobile Phone Barcodes for boarding pass purposes, as do various other transport service operators; expect to see cinema / concert tickets etc. in this format too very soon
• Discounts and Coupons - Google’s own ’Groupon’ competitior ’Google Offers’ will deliver similar savings directly to your mobile wallet
• Pass Key - Soon your Home Front Door, Place of Work etc. will all be access-controlled via NFC-type communications

This solution will obviously be pioneered in the USA, but you can expect it to migrate onto other Android devices and other countries pretty quickly.

Companies supporting this system so far include:

American Eagle Outfitters, Bloomingdales, Coca-Cola, The Container Store, CVS Pharmacy, Duane Reade, Einstein Bros Bagels, Foot Locker, Guess, Jack in the box, Jamba Juice, Macy’s, Noah’s, Peet’s Coffee & Tea, RadioShack, Sports Authority, Subway, Sunoco, Toys’R’Us, Walgreens

It was obvious that this was going to happen, a little surprising though that it has not happened sooner. Obviously there are increased security concerns with such a system as tens of thousands of mobile phones are lost every year, but then again so are tens of thousands of credit cards. The benefits though far outweigh any disadvantages, along with Google’s Android@Home, this is one of the most significant things to happen to mobile phones in years, and really puts the pressure back on Apple now...