Dear Readers,
Does everyone realise that it is now almost a year since Google first announced their Google Wallet? That's right – a full year since announcement. The product was released later in September, so that's only 9 months. But since then what have we really seen? In a few words - very little.
To be fair, Google has made some progress in signing up new retail partners but the company still hasn't managed to attract additional credit card, bank, or carrier partners. Google Wallet still only works with one credit card and bank combination: Citibank MasterCard. And the only major US carrier where Google Wallet phones can be found is Sprint Nextel. (Virgin Mobile, one of Sprint's prepaid brands will also soon offer a Google Wallet device). What this means for potential Google Wallet users is that the only credit card you can add to your "digital wallet" is a Citibank MasterCard. If you don't have a Citibank MasterCard, you can still use the wallet, but you have to load money on Google's prepaid card. And because Sprint is the only carrier supporting Google Wallet, it means that users must be Sprint (or Virgin Mobile) subscribers to use the app. The only exception is if they buy the unlocked version of the Nexus S, which can be used on GSM carriers, such as AT&T.
Commentators in the industry have pointed to two elements that they believe has hindered the Google wallet. First and formats is the available hardware - although this problem has been around for ages. More importantly is the second element; customer ownership. "The biggest problem with NFC payments is a political one," said Yossi Yarkoni, founder and CEO of a startup mobile payment company based in Israel called Digimo. "The question comes down to: 'Who owns the customer?' Why should Apple or Samsung bother putting NFC in devices if they simply hand over that customer relationship to others? Everyone in the ecosystem wants a piece of this action."
So true. However, by eschewing NFC and instead, launching a mobile payment app that only requires users to type in a PIN to access their PayPal accounts, PayPal may well have made a wise, and strategic, move. You can find out more about their service by watching these two 'Behind the Scenes at SXSW2012 PayPal Wallet demonstrations' (http://wp.me/p1Jrjn-DO) (http://wp.me/p1Jrjn-DT). Last week we reported that they had added another 15 retailers as well as deploying the service at more than 2,000 Home Depots around the U.S. A way to go I admit but they have only had the service out for a couple of months. PayPal's CEO John Donahoe said on the company's second-quarter earnings call that he doesn't see NFC ever making a splash in the market, because it doesn't offer consumers any real value. "When is it (NFC) going to be ready? Never," he said. "I think other technology solutions, like what PayPal is doing where you pay hands-free with a mobile number and PIN, provide compelling consumer experiences that don't require the actual use of an NFC technology."
It could be argued that it's this complex ecosystem that is holding back NFC. And it's not just strictly about whether handset makers want to add NFC to their devices. The ecosystem is still largely controlled by mobile network operators. And so far, Google appears to have not gained as much support as they need from them. But then again, is Google willing to admit that they need support from the MNO's or would they consider that to be a strategic failure?
If anyone from Google reads this and would like to put their view forward, we look forward to hearing from you.
Until next week.
Steve Atkins
Contactless Intelligence
Featured on C-ITV this week
Payments & m-Commerce
Google launches Move Mobile m-commerce project in Italy http://bit.ly/LxrmsK
Raiffeisen Banking Group Selects Gemalto to Secure Online Banking Services in Austria http://bit.ly/LxrTeu
Taking wave and pay to the fields, and the masses! http://bit.ly/LxrRDi
Identive Introduces Innovative Payment Tag for Mobile Phones http://bit.ly/LxrNU8
Location based mobile coupons will drive next wave of group buying http://bit.ly/LxrJ6K
Blue State Digital Launches New Mobile Payment System http://bit.ly/KbSZUk
Pros and cons of the new ‘mobile wallet’ technology http://bit.ly/KcI4ep
Increase in consumer trust and awareness key for widespread uptake of NFC mobile payments http://bit.ly/KcI2mZ
Payments and Consumer Technology Leaders See Mass Market Ahead for NFC http://mwne.ws/KcIa5Y
Telefonica Moves Into Mobile Money Market In Argentina http://on.wsj.com/KcIdi5
Google launches ‘Beba,’ an NFC-enabled payment card in Kenya http://tnw.co/JxqyiL
MasterCard loses card fee challenge, Visa Europe next http://reut.rs/JxqKhO
NFC & Mobile
ZTE announces the world’s first sim-based NFC mobile device that enables bank and toll payments in Turkey http://bit.ly/K2Esdu
ZTE: Europe is Next Target for NFC Phones http://bit.ly/LxrB7d
Tyfone Announces NFC Design Breakthrough Associated Patents and Licensing http://on.mktw.net/Lxrusu
Apple's iWallet will use Bluetooth rather than NFC, says analyst http://bit.ly/KbT4r4
NFC Use Growing Outside Smartphones http://bit.ly/KbTnlK
NFC Coming at You: Shouts From the San Francisco Summit http://bit.ly/KcI7Hn
Ingenico and Vantiv Partner for EMV, NFC Mobile and Secure Encrypted Payments in U.S. http://bit.ly/KcIf9N
Transportation, Ticketing & Loyalty
New Oyster online service goes live at Transport for London http://bit.ly/K2Ezpw
NFC Handles Coming to Tokyo Subways http://bit.ly/K2ExOn
2ergo Group launches TikTap virtual coupon service http://bit.ly/LxrrwP
Tokyo Trains Try Out NFC Advertising http://bit.ly/KbSQju
Transport for London's contactless tickets roll out behind schedule http://bit.ly/KbTpKd
Transport for London Blames Complexities for Missing Olympics Deadline for Open-Loop Payment http://bit.ly/JxqBLi
Other News & Opinion Articles
Russian Electronic Money Association says 2011 was a turning point for the domestic payment industry http://bit.ly/K2ESRa
Mobile payments already exceed cheques http://bit.ly/K2EDp3
NFC: From Theory to Practice Contains Case Studies Such As Payment, Ticketing, Social Networking and Remote Shopping http://reut.rs/KbTfT2
Gemalto Sees Doubling Of Business In Cards That Beam Cash http://bloom.bg/KbTI7V
Australian Shoppers have no patience for queues in stores http://bit.ly/KbU66t
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