Goodbye wallet – the phone will take it from here

Just announced right now at their NY offices,  Google’s NFC payments system – Google Wallet. Expected to launch in September this year, the service will allow Google Andoird users to pay using their phone at a number of retail stores.

Google Wallet

Google have partnered with Citibank, MasterCard, FirstData and Sprint for launch meaning that only Sprint users with a Citbank credit card will be able to use this from the start. This is being billed as an open platform and other payment providers and banks are being encouraged to get involved. Launch retail partners include Subway, Duane Reade, Footlocker and ToysRus starting in New York and moving San Francisco shortly afterwards.

One of the more interesting features is the tie in with Google Offers and rewards which has also just been announced. This allows you to redeem offers at the same time as paying and also collect loyalty rewards electronically rather than carrying a myriad of cards to be stamped manually.

Let’s see if Apple make their announcement at WWDC and whether its an “open” platform

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The NFC arms race

The renewed thought of Amazon creating their own device has made me realise how they are actually one of only a handful of companies currently able to challenge Apple’s dominance in the device arena, specifically around the emerging field of contact-less payments.

The next iPhone purportedly contains NFC technology which would allow the device to act as a contact-less payment method. This is already currently available in some Android devices, but due to the open nature of the platform there’s no single company who is going to actually implement the underlying payment service.

image courtesy of maclife

In order to own an iPhone you need to have an iTunes account, whilst it’s not necessary to add a card to the account I would expect all of those users who own an iPhone (or an iPad) will have at least one card registered. Apple can therefore hit the ground running with the iPhone 5 and become one if the biggest payment services in the world overnight.

Google on the other hand have little to challenge with in comparison, they have never really dealt with consumer transactions at scale; Google Checkout has never found much traction against Paypal. Due to the open nature of the Android OS, operators will want to build their own solution to charge purchases to their customer’s phone bills, which will serve to dilute Google’s ability to develop the Checkout platform.

Amazon, however, do have the customers, they also have a payment method for every single one of them. If they were to introduce an Amazon device this year, it would allow them to run head to head with the iPhone in what could potentially be the start of a very disruptive period for the finance industry.

Paypal are in a strong position with their existing user accounts for payments but obviously aren’t into manufacturing devices. They could benefit from either a manufacturer tie in or creating device specific apps that use the NFC chip to charge the user’s Paypal account. Consumer adoption is likely to be limited and the experience would be second rate to one at device level.

Facebook Places

Facebook Places, Deals and NFC could be huge

Facebook have recently brought on Goldmann Sachs as an investor which could potentially be linked to their strengthening of Facebook credits which, this year, will become mandatory for any purchasing inside Facebook apps. ASOS and now French Connection have built complete eCommerce platforms inside of Facebook and if it’s users are buying credits to use inside these Facebook apps this has the potential to make Facebook one of the biggest banks in the world. If that’s the case then I wouldn’t be surprised if we see them start using NFC technology which coupled with the Facebook Places/Deals platform would make them a strong contender in this race.

NFC based payments itself could pull up lame at the first hurdle as the entire success or failure of all of this rests on adoption of the technology by both the retailers and more importantly the consumers.