Reaction to Google’s launch of its Google Wallet NFC-based mobile payments service seems best described as “cautiously enthusiastic”, with some in the industry voicing concerns about security, fragmentation and hence, consumer uptake.
Thomas Twigg, mobile solutions manager at mobile marketing firm Velti, says the launch is yet another validation of mobile commerce, but notes that the competition for NFC mobile technology has been fierce, with card companies, operators, handset manufacturers and EPOS owners wanting a piece of the action, making for a much more fragmented market, with the danger that consumers could feel overwhelmed and confused. And, Twigg cautions, adoption will not happen overnight.
“Security will pose a serious barrier to take-up for Google, as they rely on consumers to take a leap of faith,” he says. “Only recently, a major flaw was found in Android’s operating system, and consumers are likely to bear this in mind when using the system as a credit card device.”
Twigg adds that the market is still waiting for Apple to show its cards on its NFC technology developments. “This is a trusted brand that already has an extraordinary amount of credit card details through the Apple Store, and the uptake may prove much faster,” he concludes.
For John Milliken, managing director of The Mobile Money Network, which is trying to sign retailers up to its own mobile payments system, which can be accessed via an app or SMS, the issue is fragmentation. He says: “With mobile payments already being a crowded market, I’m sure Google’s entry could help consolidate things a little. Android itself, however, is rife with fragmentation. Android handsets across the globe are running on different versions of operating systems, some capable of things other Android handsets are not. 
“Although Google’s entry in to the market provides yet another big validation, we’re seeing yet another fragmented approach, initially using NFC capabilities in the Nexus S handset. Although some experts and analysts are claiming that Android could be the platform to kick-start mobile payments, to truly achieve critical mass the market’s approach must be agnostic. Any handset, any financial service provider, any network, all consumers.”
Fred Huet, managing director of Greenwich Consulting, says that with Google Wallet, Orange and Barclaycard’s Quick Tap service, and other operators planning their own offerings, “it is just a matter of time before people are paying for their morning coffee with their phone. But how long retailers take to deploy technology and a lack of NFC-enabled handsets could potentially stand in the way of mobile payments taking off in the UK this year.”
Huet notes that Samsung, Nokia and RIM have are planning to implement NFC in future devices, and that large retailers such as Subway and Toys ‘R Us have signed up to the scheme in the US. “Worldwide, mobile payments are starting to take off – the technology is particularly popular in Japan and trials have been underway in Nice, France,” he points out. “Handset manufacturers have proved that they are looking to get involved in mobile payments, while operators are beginning to see the benefits – hence Orange’s Quick Tap announcement last week. Retailers need to recognise the benefits, which include more efficient payments and ability to garner more data about customers. Once all three begin working together, the limits for mobile payments are endless.”
But Huet believes that this is potentially about much more than mobile payments. “The frontiers between mCommerce and eCommerce are blurring, becoming encompassed in what we call ‘digital money’, where a digital wallet is accessed through many different channels. 2011 will be the year when key players start to throw their hat into the digital payment space, and this could indeed be the start of ‘digital money.’ However even with the might of Google this remains to be seen.”
