According to a recent CBC article, Google will be launching it’s mobile phone payment system early next year. While Google is new to to wireless point-of-sale payments, they excel at user experience and integration, two key concepts their competition seems to lack.
As Google Wallet prepares its launch, everyone and their grandmother is trying to establish their technology as your go-to payment system. There are mobile phone payment systems (Payfirma, Kudos, etc.) that allow anyone to accept mobile payments using a smartphone. Embedded near-field communication (NFC) chips in credit cards such as Mastercard’s PayPass or Visa’s payWave are struggling for traction, but have yet to truly take hold. Bank of Montreal have even started sticking NFC stickers to people’s phones in order to shoehorn PayPass into a more mobile platform. There are also Zoompass and Paypal, which allow purchases to be made securely from your bank account, through an intermediary, and even by text messaging.
The trouble that these companies are running into is that they are trying to make it easier for you to use their product, and only their product. The trick, as Google would have you believe, is to change how people experience consumerism, with discounts and rewards, location integration, and multiple payment platforms. While Google Wallet currently only supports MasterCard PayPass, there are plans to extend it to different credit cards, redemption cards, and even tickets and boarding passes.
Alternately, consumers are running into another problem. The plethora of payment options being made available is much like the initial Android tablet offerings; there are so many options the consumer winds up choosing none. In the one corner you have Google Wallet, a great payment experience that requires a phone no one has. In the other corner, you have a variety of payment options with no unifying platform. A winner may eventually rise out of the rubble, as Visa and Mastercard are investing a lot of money not to lose this fight, while Google projects half of all smartphones to be NFC-capable by 2014.
Juniper research, a telecommunications analysis firm, believe mobile payments to increase from $170 billion in 2010, to $670 billion by 2015, a almost 400% increase. Furthermore, a 2011 Mobile Life Survey by TNS, found that although only 11% of Canadians use mobile devices to bank or make purchases, a whopping 41% would like to.
Finally, let us not forget the retailers, who have to support all of these different devices, or risk losing sales. While this may not be difficult for larger companies, it is the small business owners who feel the real pain.
For more on this confusion read Knowton Thomas’s initial reaction - as true today as a year ago.