Platform Innovation // Blog

Will this mobile payment app be on your holiday wish list?

Do you hate it when you leave your wallet at home? Do you wish you could have everything all in one place? More and more, cell phones are being used for more than just phone calls and emails. Now with Google Wallet, you don’t have to worry about carrying your purse or wallet in addition to your cell phone.

Mobile wallet, also known as mobile payments, has been adopted in many parts of Europe and Asia.  Users use mobile wallet as an alternative payment method instead of paying with cash, cheque or credit cards. There are four primary models of mobile payments (Source: http://en.wikipedia.org/wiki/Mobile_payment): Premium SMS based transactional payments; Direct Mobile Billing; Mobile web payments (WAP), and contactless NFC (Near Field Communication). NFC is mostly used for purchases made in physical stores or transportation services.

In the US, mobile wallets have been slowly creeping into stores and transportation for consumer adoption. According to eMarketer article: “Mobile Wallets Move Closer to Reality:”

“Many players will be needed to make such transactions possible. From carriers to handset manufacturers to software providers to retailers, mobile payments will give a wide variety of firms a chance to make money—and add value for the consumer.

Defining that value will be critical for consumer adoption. The concept of a mobile wallet may appeal to technophiles, but the average shopper approaches the idea with trepidation. Fears about privacy and security weigh against the convenience factors of mobile payments, and mobile carriers, credit card companies and other service providers must be prepared to address those concerns. Linking mobile payments with targeted offers, easy-to-use loyalty programs, and deals and discounts are carrots that may encourage consumer uptake.

With Google Wallet announcement last month, it has made their competitors open their eyes more to what could happen in 2012.

What is Google Wallet?

http://www.google.com/wallet/vision.html

Google Wallet is an Android app that makes your phone your wallet by simply taping your phone to pay or redeem offers using NFC. Your credit cards will just be virtual versions stored on your app.

Right now, the app is only available on Nexus S 4G by Google, available on Sprint. Google also partnered with Mastercard® and Citi® cards and hundreds of thousands of merchants. Google is also offering a prepaid card just in case you don’t have a credit card. This is the beginning of a new change in ecommerce for users in the U.S. Players in the mobile ecommerce field have been trying for years to get this right, now Google Wallet might be the one.

The main thing a consumer fears is security. Google’s secure technology provides many layers of security. For example, Google Wallet stores your encrypted payment card credentials on a computer chip on your phone called the Secure Element. Think of the Secure Element as a separate computer, capable of running programs and storing data. The Secure Element is separate from your Android phone’s memory. The chip is designed to only allow trusted programs on the Secure Element itself to access the payment credentials stored therein.

While you are shopping during the Holiday season, you might want to actually think about Mobile Wallet for Holidays 2012. After all, you’ve already got your arms full. Why not give Mobile Wallet a try?

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