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The beginning of M-Wallet era with Google


Do you hate pulling out your credit cards, signing on the receipts or fumbling with changes? Now you can make the payment with a simple tap, swipe or wave of phone. And what is more, it works even when the battery is down. Google Wallet launched early last week is all set to transform the shopping experience of consumers.
The much anticipated application was debuted on the company’s first smart phone, the Samsung Nexus offered on Sprint Nextel.

Google’s M-Wallet powered by Near Field Communications Technology to enable payments was launched in partnership with CitiMaster Card who are pioneers in the use of NFC chips on some of its credit cards from as early as 2000s. To make a payment, you just have to swipe your phone at a PayPass-enabled terminal (which are already popular in gas stations, restaurants and retail stores), and your payment is made.

Good thing about Google Wallet is that any number of credit cards can be uploaded to the application. Though now activated only for Citi Mastercard users, the application will be available for other credit card services and other phones shortly. In course of time, a wide range of cards including loyalty cards, gift cards, receipts, boarding passes, tickets, and even your keys will be seamlessly integrated to your Google Wallet. Offers and loyalty points will be redeemed automatically with a single tap via NFC.

The application comes as default with Google’s smartphone and has multiple layers of security to prevent unauthorized access and accidental payments via Google Wallet. In order to use the application, the mobile has to be unlocked, this negates the chance of initiating the application unintentionally. Moreover, the payment is processed only after the verification of your unique PIN. This ensures that there is minimum risk even if your mobile phone is stolen. Google also has it own additional layer of security via “secure element.” All the encrypted information and credentials are stored on “secure element,” a separate computer chip on your phone. The chip allows only trusted programs on the Secure Element to access the payment credentials stored therein. The application also provides a detailed report of all transactions for all the cards linked to it.

With the launch of Mobile Wallet, Google has undoubtedly triggered a new wave of aspirations. Everyone from PayPal to the wireless carriers is vying with each other to introduce new and easier ways to make purchases, receive and redeem coupons and store ticketing information on mobiles. Google with its launch of m-Wallet ahead of others, will have a definitive edge over others trying to launch their own m-commerce applications. The head start should help Google better its offerings first and familiarize people with the idea of using their phones as wallets.

So what does this really mean for businesses and consumers? Google Wallet offers an “integrated experience” to consumers by combining couponing, location-specific advertising and payments compared with other daily deal competitors. And this means a lot of opportunities for retailers, especially small businesses. According to industry experts, once mobile wallet takes off, with its real-time analytical features, small businesses will benefit immensely, as they can run real-time advertising and loyalty campaigns, until now which only big players were able to afford.
Google Wallet helps to integrate the dispersed data stored online and offline. This will give Google the ability to offer cost per transaction models on keywords and display ads when it becomes integrated with the Wallet function. Advertisers will be able to keep a track on the percentage of people who came to the store seeing Adwords ads.
Google’s advantage will be that it will be able to offer shop keepers/ brands a closed loop sales and marketing process by tracking the complete cycle right from people seeing online ads, and then come to store to check out the product and then ordering it online. The closed loop view provides advertisers ability to compute precise measurable return on marketing investment.

From a consumer’s perspective, by using Google Wallet, consumers will have access to well organised relevant shopping information which can be easily accessed at the right time. Retailers will be able to enhance the quality of service by connecting the right product or offer to the right person at the right time.
All said the transformation will not happen overnight. This is mainly because the application is now available only to those consumers using Nexus S in the U.S., on the Sprint network who either have a Citibank MasterCard or have purchased a prepaid value card. Also, not many retail stores have compatible NFC point-of-sale terminals to handle such payment transactions.

Other possible challenges Google could face are on security and privacy front. It will be interesting to see how Google will strike a right balance between these two factors. Google’s success in the mobile payment will be much dependent on winning the trust of consumers and the confidence of commerce partners.

Rajesh Padinjaremadam
CEO & Co-Founder
RapidValue Solutions


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