This past week Google added a new service to their plethora of products it has to offer. According to their website, Google Wallet is a new mobile app that will simply make your phone your wallet. It stores virtual versions of your existing plastic cards on your phone, along with your coupons, and eventually, loyalty and gift cards. Their intention is that Google Wallet will be an open mobile wallet holding all the cards and coupons you keep in your leather wallet today. It stores virtual versions of your existing plastic cards on your phone. Simply tap your phone to pay and redeem offers using near field communication (NFC), which is a wireless technology that enables data transmission between two objects when they are brought within a few inches of each other (ex: Bump app for android and iPhones). The new product will be compatible with Sprint’s Nexus S 4G from the get-go and hopefully switch over to other networks, for iPhone users like myself. This will mark a huge shift in the way we pay for things, and your phone will basically hold everything you have carried in your pocket before. Google failed to acquire Groupon earlier in the year, and it will be interesting to see how these and similar service pan out.
With this in place there are two underlying questions that jump out at me right away. Will Google Wallet be one hundred percent secure to its users? How will Google make money off of this new product? Google implements a PIN security system when logging in to the app, in addition to many security and privacy features that deal with your network provider and transactions. Also, Google Offers will generate some revenue for this new product. They will sell coupons and advertising that come along with the whole experience. Portland Oregon is the only city with Offers for now, but coming soon are New York City, Oakland, and San Francisco. As for the user, Google will not charge a transaction fee!
First Data processes $40 billion in payments a year, even though, as Labry says, “You’ve never heard of us unless you’re in the industry.” They process 50% of transactions in the U.S. Wow.
“We house 700 million cards and card numbers on pieces of plastic.” In the future, that piece of plastic will be stored on a phone. Fascinating.