When you pay with your phone, it automatically redeems offers and earns loyalty points for you
Boom, Google Wallet has gone live at the just-finished presser in Google’s New York office. The search Goliath means business, that’s for sure. They’ve managed to convince the journos like us who have seen it all that Google Wallet is no toy. We have here an end-to-end mobile payment solution which quite possibly marks an inflection point in e-commerce. I ain’t drinking Google’s Kool-Aid, bear with me for a sec.
There are two pieces to it: Google Wallet itself, which runs as a native app on your mobile device equipped with an NFC chip, and Google Offers, a Groupon-like service providing rebates, savings and offers that can be easily redeemed on your device, at the points of sale. One click on an offer on the web sends the coupon over-the-air to your devices authorized for Google Wallet. You can also use your device’s camera to snap the Google Offers icon found on printed marketing materials such as in-store posters, banners, print ads and so forth.
Paying for goods is a one-tap affair involving waving your device in front of the wireless payment terminal at participating merchants. The transaction is processed within seconds and directly settled with your issuing bank. In addition, your device negotiates with the merchant’s terminal to automatically redeem offers and earn loyalty points for you. Someday, Google boldly proclaimed, stuff like boarding passes, tickets, ID and keys will be stored in your Google Wallet. You will also get electronic receipts that will eliminate bills on paper. Looking good so far. What’s the catch?
The keynote demonstration had Google’s speaker buying a shorts for his daughter. He waived the phone and the clerk’s terminal took into account his loyalty card and automatically deducted his saved coupon. The live transaction was handled successfully in the second try.
Even though the solution currently works only with a Nexus S 4G smartphone on the Sprint network and requires a Citi MasterCard and MasterCard PayPass terminals, Google pledged to expand reach and add more partners under its fold over time. Launch partners include retailers such as Macey’s and Subway, in addition to a bunch of supporting back-end companies like card issuers, payment processors (FirstData) and banks (Citi). To ensure people with non-supported credit cards can use Google Wallet, Google even rolled out its own prepaid card that can be loaded with funds from other major credit cards.
This lets you use Google Prepaid Card as your preferred payment method in the wallet app. The Google wallet app is Android only so far. There was no word on possible availability for other platforms at the press conference. The program sports the lock screen and lets you pick a passcode. It also keeps your other information (loyalty cards, credit cards, gift cards, prepaid Google cards), including your saved check-in offers, places offers and offer ads securely locked in a phone chip called the Secure Element, which is separate from the phone’s memory and allows access to only trusted programs.
Also cool: Merchants can integrate their offers and loyalty programs with Google Wallet, which lets them show frequent customers loyalty program offers on their handsets when they hit a certain spending threshold. Google Wallet is being field-tested and that plan on releasing it “soon”. The official Google blog has more information. Apple, of course, is apparently contemplating a similar mobile wallet for its iPhone tied to the iTunes ecosystem.