Google Wallet was officially released in the summer of 2011 but take-up has been relatively slow, primarily because it has not been available to a significant proportion of the cellphone population. Limited only to Google-branded handsets like the Nexus S with NFC (Near Field Communication), this contact less payment system, which some see as being the replacement for credit and debit cards as well as cash, is still a niche technology.
However, many are now suggesting that 2012 will be the year in which Google Wallet will come into its own, representing an entirely new payment method which may change the retail industry forever. Of course this can be debated at length, but it is difficult to refute the idea that Google Wallet will gain market share over the next 12 months.
What is Google Wallet?
For those new to the technology, Google Wallet is essentially a digital representation of your personal finances which allows you to make low value purchases when you are at a store with a compatible terminal. Rather than searching through your bag or wallet for your credit card, you can simply place your compatible smartphone close to an NFC-enabled surface at the cash register and money will be taken from whichever account you have linked to the Google Wallet service.
What Else Can It Do?
But the Google Wallet app is not just a one trick solution as with other contactless payment schemes. It supports not only bank accounts and credit services, but also other payment methods such as Google Checkout. It also reflects Google’s love for advertising, ensuring that you see exclusive offers, vouchers and deals which are only redeemable when you use your smartphone at a participating store. The aim is to combine the best parts of online shopping with real world retail and could help keep traditional bricks and mortar outlets afloat in an increasingly tough market.
Possible Problems
One of the roadblocks that is preventing the adoption of Google Wallet and NFC in general is that major investment is required to set up the infrastructure of compatible terminals in stores. There is already a long established payment card network in place, so convincing users that NFC is more convenient when it is not as widely available as existing methods may be difficult.
Google Wallet is not the only NFC service on the block as existing card providers are also beginning to embrace the technology. Visa recently announced that it would be approving a number of compatible smartphones for its PayWave application which aims to compete with Google Wallet. Models like the Samsung Galaxy S2 and a host of BlackBerry handsets will be able to take advantage of NFC wherever they find it.
The roll-out of NFC seems to be unstoppable while there is investment there to support it and Google clearly has a vested interest in making it work. But for the time being, the future remains unwritten.
Author bio:
John East is a personal finance journalist with a keen interest in the impact of technology on the retail sector. He regularly contributes to moneysupermarket.com.
