Don't
get rid of your leather wallet yet: A year on from Google Wallet
It's been a year since
Google unveiled Google Wallet to the world and five months since
Google declared that it wanted Google Wallet to play a major role in
the 2012 Olympics. Yet a year on Google still doesn't look as if it
is in a better position to bring contactless payments to the masses.
In December of last year Google announced that it wanted to get its
virtual wallet app usable and fully functional for the London
Olympics in 2012. Google envisaged a system by which items could be
paid for without the use of a credit card and instead via a
contactless transmission from your phone to a system by the checkout
similar to that found in Starbucks. While Google Wallet may have
stalled the vision of a wallet-less society is closer than it was a
year ago, along with all the benefits and problems associated with
such a system.
Google had hoped that
the London Olympics would be the perfect test venue for its
burgeoning platform but problems with banks and vendors has caused
the idea of it being one of the main ways of purchasing items at the
Olympics to be postponed. Both Visa and Mastercard have also entered
the race to develop a contactless mobile payment system and problems
with developing an all encompassing system for mobile payments being
resolved, albeit very slowly, the future of a wallet-less society
could be with us sooner than you think.
NFC and
Implementation
Google Wallet is
Google's name for its contactless mobile payment method that works
via NFC. NFC stands for near field communications and is something
that is slowly being introduced into flagship phones around the
world. The brand new HTC One X and Samsung Galaxy SIII for example
both have inbuilt NFC. NFC allows information to be transferred
without contact between phones and in Google Wallet's case a payment
module that you can just tap your phone against. Google's idea and
one that has been taken up by other companies is to store your credit
card data on your phone and thus discard your wallet in favour of a
simple, quick and easy to use payment system. Or as Google puts it,
“so that the only plastic you'll need is your phone”.
Indeed Google Wallet
has already been introduced to some retailers in the United States
and allows users to simply tap their phone to pay for items. GAP and
Footlocker are already partnered retailers of the scheme with Google
saying that Google Wallet will soon be able to be used in Subway.
Less time Queuing,
more time enjoying life
It is not hard to see
the benefits of a world in which we only need to carry around a
mobile phone. Not only would Google Wallet allow us to leave our
leather wallets at home and thus allow us to carry round one less
item to lose but it also has the potential to speed up paying for
items. While the English may be famous for their love of queuing not
all nationalities have such a disposition to standing in line. Just
tapping your phone on a payment system would produce a near
instantaneous method by which to pay for your shopping leaving you
more time to enjoy other things in life. Unless you're English of
course, then maybe you'll shun Google Wallet simply to enjoy a good
old queue.
Security, Limited
Reach and Pay Pal
While the benefits of
carrying around less and being able to spend more time away from
queues may be appealing there are certainly issues that have arisen
over the past year that need to be addressed before we will be able
to walk into any shop and simply tap our phones to pay.
The first question many
people ask when told about this sort of payment method is, is it
secure? The security of wallet-less payment has been something that
Google, Visa and Mastercard have all been extremely keen to stress is
paramount and while there are of course always inherent dangers with
any sort of payment methods Google believes that it is safer than
actually using a physical credit card. According to Google there are
four methods they have implemented in order to keep your payment
information. Two are traditional lock screens one for the phone and
one specifically for Google Wallet itself. Furthermore Google has
stressed that unlike a credit card there is no account information
displayed on the phone. Finally all android phones capable of using
Google Wallet have a separate chip that encrypts and stores your
credit information. While all of these methods certainly seem as
though they make Google Wallet just as secure, if not more so than
the traditional credit card Google, Visa and Mastercard will have a
tough time convincing the less tech savy amongst the population to
subscribe to a payment method without paper or cards.
A second problem for
Google is that its payment system requires an NFC equipped mobile
device. Not only are devices that currently contain NFC limited to
the high end of the mobile phone market but they also require users
to understand that their phone is equipped with NFC. It is likely
that many of the people who own NFC capable devices have no idea that
they do or what NFC is. Until NFC is spread more widely in both terms
of devices sold but also in the public’s consciousness Google is
going to struggle to gain traction in the market.
Indeed a greater
problem for Google is that Pay Pal seem to have an answer to this
problem already and it doesn't involve NFC. Instead Pay Pal have
launched an initiative whereby users are able to pay items in shops
such as Abercrombie and Fitch by linking their pay pal account to
their mobile number and are therefore able to pay for items using
their mobile number and a pin. While not quite as convenient as
Google Wallet it is a system that doesn't rely on a high end phone
yet still allows users to leave their wallet at home. While this
system is of course only limited to Pay Pal accounts at the moment
there is no reason why such a system couldn't be used by credit card
companies.
Contactless payment
is the future, The unknown is how
There is no doubt that
contactless payment is the future of paying for items in retail
shops. With major companies such as Visa and Mastercard along with
Google designating millions of dollars towards the research and
development of this sector of the market it is only a matter of time
before people regularly pay for items without their card. However,
Google Wallet has shown that there is still a lot of work that needs
doing if it is to become the de facto standard by which we pay
for items in store. With Pay Pal's own concept clearly proving
successful it is up to Google and credit card companies to smooth out
the issues holding NFC based initiatives back. Indeed maybe all it
will take to really bring contactless NFC enabled payments into the
mainstream will be a quick call to Tim Cook at Apple HQ.
Edit: Just after this article was posted it was announced that the Post office in the UK hopes to have 11,500 contactless payment readers in their stores by October of this year. If this role out happens as planned it will become the biggest supporter of the technology in Europe. The readers will support both Visa and Mastercard's competing standards of NFC with both mobile phones and contactless cards listed as a means of payment. Furthermore there will be a maximum restriction on how much you can spend via this contactless method of £20. While this is certainly good news regarding the introduction and spread of NFC payment options it only serves to highlight how Google, especially in the UK, is losing out to the both Mastercard and Visa who have shown that Google Wallet isn't necessary for contactless payments.
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