Things every business needs to know about Google Wallet
The smartphone industry is marked by tremendous competitive rivalries between key players. The competitive showdown between Google’s Android and Apple’s iOS mobile operating systems seems to grow more and more intense each year.
What has taken this fierce competition to the next level is extending it to the mobile payment system front. Google has responded to Apple’s Apple Pay mobile payment system with Google Wallet. However, much of the discussion on mobile payment systems is done from the point of view of customers while the business side is ignored.
Here, we will look at what Google Wallet is and what it means for SMBs.
What is Google Wallet?
Google Wallet is a mobile payment system similar to Apple Pay, which allows users of Android operated smartphones to store credit cards, debit cards, and other cards, as well as redeem sales promotions, on their phones. Both services utilize NFC (near field communication) technology to allow users to make secure payments using their phones by simply tagging them to a NFC-enabled terminal at checkout.
“In the future, our goal is to make it possible for you to add all of your payment cards to Google Wallet, so you can say goodbye to even the biggest traditional wallets”
- Osama Bedier, Vice President of payments, Google
How does it work?
Google Wallet works via the NFC chip embedded within Android phones that allows users to connect their phones with other devices at very short ranges.
The technology can work on any of Mastercard’s PayPass enabled terminals, 144,000 of which are set up throughout the country. Users can also locate their nearest PayPass enabled terminal from the app to facilitate an NFC-based shopping experience.
There are many benefits that SMBs, particularly retailers, can achieve by installing NFC-terminals at checkout. Firstly, more than 50 percent of your online traffic comes from mobile phones, and what better way to accommodate that than to let your customers shop from their phones and improve their shopping experience.
Secondly, Google Wallet provides effective fraud protection on a 24/7 basis using efficient encryption technology. More importantly, retailers can benefit from immense loyalty coupon programs and discount offers can easily be notified to thousands of Android-using potential customers.
Although Google Wallet has a lot of potential, the service hasn’t exactly been a resounding success so far. This is because of Google’s failure to bring banks on board as middlemen for gathering information about customers and redirecting it on Google’s servers to be able to target them more efficiently via ads. Whether one thinks stalking customers is ethical or not, this is what Google’s business model is based on. In contrast, the Apple Pay system is more ethical in this regard.
“I think our goal here is really achieving mass merchant adoption, so the availability of these NFC devices is about that and also making it easier for consumers to replace their wallets with their smartphones, hopefully more and more over time. So, reducing friction in everyday shopping experiences is how we approach [Wallet] and the focus on the user. We’re really developing a fully functional payment system.”
- Omid Kordestani, Google’s sales boss
Apple CEO, Tim Cook, stressed on the importance of not gathering data at the expense of privacy that in time could prove to receive more traction with banks and other partners. So while Google Wallet does have potential, it will not be able to prove its merit unless it can build an alliance with the right partners.