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The mobile wallet has finally arrived

01 June 2011 1 comment

Retired member

The latest development in the world of mobile is that Google is about to unveil its version of the “electronic wallet” which will allow users to make payments at selected retail outlets at the wave of a mobile phone. This follows the announcement it made recently that it is working with MasterCard to incorporate near-field technology (which offers a payment capability) to its Android phones.

The news from Google coincides with a great deal of recent market announcements, including Orange and Barclaycard’s new Quick Tap service and O2 outlining details of its mobile wallet out later this year. All of these developments highlight the growing momentum behind the mobile financial services.

With all this manoeuvring by telecoms and financial services players, however, a critical question is whether consumers will actually take up the service. Well, according to a recent YouGov survey, demand does exist for wave and pay, with two in five smartphone users keen to use their mobile as their wallet. The survey found that male smartphone users are more likely to want to swipe their phone to make a payment (47%) while over a third of female smartphone users (37%) are interested in this contactless capability.

Interestingly, out of the smartphone operating systems, iPhone users are most inclined to use their phone as a wallet with 56% saying they would like to ‘wave and pay’. This means that if Apple does decide to include the chip that enables contactless payments in the new iPhone 5, it could be poised to take a large share of the mobile payments market, with the iPhone currently the second most popular smartphone in the UK. Also, 42% of BlackBerry users said they would like to swipe their phones to buy goods however this desire was less fervent among Android smartphone users (40%) – note to Google.

Overall, these statistics provide important guidance to banks embarking on their mobile strategy and demonstrate that there is a need to consider developing apps for numerous mobile platforms. Proving the business case is often the biggest barrier to investment in innovation like mobile banking but these figures show that consumer demand is strong in the UK market.

This content has been created by the Finextra editorial team with inputs from subject matter experts at the funding sponsor.

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Comments: (3)

A Finextra member

01 June 2011

James - personally I can't imagine using the Google wallet as it's bound to be ad-cluttered. The real-world equivalent would be having a talking greetings-card chip embedded in your leather wallet, bleating inane commercial messages every time you reach for your cash. It will be like having Microsoft's Clippy perched on your shoulder urging you to super-size every purchase. That way lies madness

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A Finextra member

01 June 2011

Google Wallet is good but... If I am merchant and I want to add Google Wallet to my Point Of Sale system there are technical things I have to calculate and some business views too. First I have to figure it out, how many of my current customers are likely to switch to using new payment method, especially if only one card provider is offering solution and one phone manufacturer. This calculation needs to be done before merchant can decide if this is lucrative solution or not. If this business calculation is good, then some technical calculations needs to be considered.

Question is how much new NFC- equipments cost, how much current POS software needs to be fixed before it can accept new payment method and finally what happens if this system is upgraded can merchant itself update systems or does it need always outside help.

I think generally only few merchants are really thinking this far, they only make calculation where they ask how much it will cost and are there enough customer.

It will be egg and hen situation. If there isn't enough users, there won't be enough merchants to support this payment method. Even this idea is really good.

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Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

02 June 2011

According to this page from its website, Google Wallet is an mWallet and not another method of payment. Its basic mobile payment feature seems to work wherever MasterCard PayPass POS can be found without needing any specific adoption by the merchant. It's only to push out offers and loyalty rewards to Google Wallet users that merchants need to sign up with Google Wallet. As a result, the merchant's business case pivots largely around the cost of PayPass contactless POS equipment and needn't be impacted by adoption rate of Google Wallet since the same POS can support many other form factors including contactless cards and competing mWallets that work on PayPass.

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Nicole Pienkos Head of Regional Banking at FIS

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