Google finally targets mass market with mobile payments revamp

Facing hurdles

However, Google Wallet still faces a multitude of hurdles not least the fact that US mobile operator trio, Verizon, AT&T, and T-Mobile, continue to ban the app in favour of their own mobile payments joint venture, Isis. Reports claim that consumers on the networks will now be able to download the app, but they still won’t be able to complete NFC-based payments. The update has sparked speculation that a version for Apple’s iPhone is now in the works, something that could boost adoption of the service in the US.


NFC Flop

While NFC-based payments are still at the heart of Google Wallet, the decision to open the app up to all consumers without an NFC-enabled Android smartphone illustrates the mobile payment standard’s lack of traction. Once hailed as the feature that would drive mobile payments to become a multibillion dollar industry, NFC has failed to live up to its potential.

Smartphone vendors are yet to integrate into their devices as standard, though shipments are up, and consumer education remains a problem. The number of handsets shipped featuring NFC grew 300% in 2012 to hit 140m units globally, with the top 10 mobile vendors releasing almost 100 models between them last year. But barely anyone knows how or where to use it. And with Apple’s apparent refusal to integrate NFC in any of its iPhones, it appears the technology is still a long way from the mass market.

Previous analyst predictions pegged NFC-based payments to top USD100bn by 2016 but these have been scaled back as adoption falters. Gartner now asserts that NFC will account for just 2% of the mobile payments market this year with growth remaining slow until 2016.


Importance Of Google Wallet

Google wants to make Google Wallet work amid reports that the firm is actually losing money from the service. The app has only racked up 10m downloads and Google has ploughed huge sums in the service as well as forking out USD300m to acquire startups to help develop the app. By providing non payment-based features such as a loyalty card platform that requires the smartphone’s screen to be scanned, Google will hope that it will attract a new wave of users. Providing more value for merchants is a key factor in helping mobile wallet services take off, but Google’s focus on the area is not good news for standalone mobile-based loyalty startups like Tab, particularly as and when Google starts racking up merchant partnerships. The ability to conduct mobile-based money transfers will also provide a pull for consumers as they become more comfortable with handling money on their smartphones. New forecasts from Juniper Research assert that 400m mobile phone owners worldwide will use their device to transfer cash by 2018.

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