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.