What is Google Wallet

Google has been known to give a new meaning many offerings they have rolled out. For instance, Google Maps has changed how we used to find direction, Google Documents has changed the way we used to share and do collaborative work, Google Calendar has changed the way we used to organize our time, Google translate has changed the way we, well, translate. Google now has come up with another offering in the same league – Google Wallet.

What is Google Wallet?

Google Wallet is a an Android Application, launched on 19th September, 2011, which is stored in a users' mobile and can be used to make payments. As simple as it sounds, it is capable of doing highly complex payment related tasks. Thus, Google Wallet does not really change the way we use our wallets or purses, in fact it simply removes the need to carry one. Hence, like all of its other brothers, it aims to replace our so-called traditional counterparts, in this case – wallets. 

How Google Wallet works? 

Google wallet allows a user to store his/her credit cards in a virtual form and then make payments by simply going near a special payment terminal known as a PayPass enable terminal and tapping the phone while running theGoogle Wallet application. The near field communication (NFC) technology which Google wallet uses identifies the virtual credit card stored on the phone and then goes on with the money transaction – seamlessly. Google wallet allows a user to store not only his credit cards but also loyalty and gift cards and redeem them in a similar fashion but with the advantage of being automatically used. In the longer run, it will be able to store receipts, tickets, boarding passes and even keys to synchronize with the appropriate device.

 

About the Google Wallet usage

The app is now available for the Sprint Nexus S 4G although Google has registered plans to develop the same app for several other phones. For now the users can make the payment using two services, namely Citi MasterCards and Google Prepaid Card but these can store the information for all major credit cards. The service is already functioning for over 3 lakh MasterCard PayPass merchant locations and Visa has also licensed its technology to integrate with Google Wallet.

About the Associations
 

Google has declared that Google wallet will work in an open ecosystem based commerce where it will collaborate with not only merchants from different sectors but also with different mobile manufacturers and service providers to integrate its system with theirs. From the merchants side, the list includes Subway, McDonalds, Best Buy, Bloomingdales, RadioShack, The Container Store, The Home depot and Office depot among a lot others and from the non-Android mobile OEMs, Google is open to partner with iPhone, Microsoft, RIM among others. With this kind of a diverse system, the Google Wallet is sure to soon change the ways we make our payments.

Business Model

Google is not going to charge either the merchants or the users for any of the service given by Google Wallet. Then how do they earn? Yes, you guessed it right – Advertisements. Google will use it vast database to push sponsored advertisements to the users. This can be seen as a Win-Win situation for everyone, as the different merchants can attract new customers by sending discount vouchers or loyalty coupons, the customers get not only these benefits but can also enjoy seamless, fast and convenient payment, last but not the least, Google, well earns.

Google Wallet Challenges and solutions: 

Though Google Wallet promises to be one of those next big technological advancements, the time has not yet bid adieu to the old traditional wallet. Few reasons for the same are as follows:

  1. Though many of the big retailers are partnering with Google Wallet, there are still many more who have not.
  2.  Even the ones that have partnered do not have the PayPass readers in all of their outlets.
  3. To shift from the present money collection system to an entirely new one will take at least 2 years for the mega marts.
  4. Concern among users regarding the security of the payment.
  5. Most importantly, there are not enough NFC (near field communication field) phones which can use the Google Wallet technology.

Google understand these challenges and has been working to make things work:

  1. As Google has kept the entire service on an open e-commerce platform its free for merchants as well as users and hence, more and more retailers will try to join the growing plethora of Google Wallet.
  2. With Google’s network and way of giving advertisements, retailers are bound to advantage from this and will be more than ready to install the PayPass readers
  3. Google has added an additional layer of password security to enable safe transactions
  4. Google is coming with stickers for different credit/debit card companies which will work for non-NFC mobile phones also.

How popular Google Wallet will become, only time can tell, but it is indeed an interesting service.