Stating that Google aims to redefine payment, shopping and ecommerce, Google’s vp of commerce Stephanie Tilenius announced today a “mobile open and local” (MOLO) system for near-field communications (NFC) payments via smartphone, to be rolled out in New York and San Francisco for field testing.
As had been rumored, the company has partnered with Citi Mastercard, Sprint and First Data to create a “Google Wallet” designed to integrate online payments and mobile shopping. The virtual wallet app will be available in the coming months through major retail partners which include Macy’s, Walgreens, Subway, and Toys R Us. The company stated that it is in negotiations via its partners with thousands of retailers around the globe to create an ecosystem for the Google Wallet.
The beta release will include support for special offers, loyalty cards and payments. Google is also launching Google Offers, a Groupon-style program that will also be integrated with the Google Wallet and will be launched in Portland, San Francisco and New York. Google Offers will encompass check-in offers as well as offers-of-the-day.
Google will not charge a transaction or membership fee to consumers, but will use the wallet as a showcase for its display advertising. Google’s goal, stated Tilenius, is to bring all aspects of shopping and checking-in to locations “togetherinto a single-tap experience” merging online and offline commercial activities. “Your phone”, stated Tilenius, “will become your wallet.” Google’s Wallet will launch nationwide this summer and all future android phones will support NFC payments. The move will allow Google to enhance its search position, support its display advertising through Google Offers and create a potentially massive pool of granular consumer data, ranging from shopping habits to travel needs.
There are numerous challenges facing Google when it comes to making Wallet work. For one, you know what most people think of when they hear the acronym NFC? The National Football Conference. As in, “remember that NFC championship game when the Giants played Green Bay and it was 20 below?”
You know what people don’t think of when they hear NFC? Near Field Communications. Except for maybe Eric Schmidt, that term is meaningless to the average person.
If Google wants to succeed with its new Google Wallet initiative, executives ought to drop the NFC acronym when trying to market to the masses — or even marketers. For that unfortunate techie term is just one of the hurdles facing Google Wallet, not to mention the whole cell phone-as-credit-card-replacement phenomenon-to-be.
The Google Wallet is only available on the Android Nexus S phone and that’s awfully limiting. A company called Apple has sold 100 million iPhones — seemingly an ideal base for a Wallet product. Is Google going to partner with its blood rival in mobile to ensure Wallet adoption?
But realistically, to gain major traction, Google Wallet needs to be baked into phones before they are sold, rather than distributed as just another app. To change consumer behavior that radically, people need the functionality to be as simple and as widespread as possible. As we’ve already seen with QR codes, the average person isn’t inclined to download an app to be used in conjunction with ads or at retail locales, even if it dangles the possibility of saving money.
Mike Shields contributed to this story.