Google’s near-field communications (NFC) based Google Wallet launched with enormous fanfare in 2011. Then it fizzled. Now it could ironically be revived by competitor Apple as the latter prepares to offer its own iPhone-based mobile payments system.
A number of media outlets have reported Apple deals with credit card issuers American Express, Master Card and Visa in anticipation of the launch. There’s also widespread speculation that Apple will finally include an NFC chip in the iPhone 6 as part of its rumored payments product. If that’s accurate it could also boost in-store payments for Google Wallet.
We should find out on September 9, when Apple holds its iPhone event. Danny Sullivan will be on hand to cover it live.
Google Wallet is technically a universal umbrella for Google Payment services, online and off. Where Google Wallet has stalled is in offline or in-store payments. However with Android adoption Google has continued to collect more user credit cards.
US consumers to date have largely shunned broad “mobile wallets” in favor of specific in-app payment scenarios, which are growing (e.g., Uber, OpenTable, Starbucks). What I’ve called “horizontal” mobile payments (e.g., Google Wallet, carrier-based ISIS) have not taken off because of a lack of consumer education, insufficient incentives and security concerns.
Source: Thrive Analytics (2014), n=1,386 US smartphone owners
A recent survey by Thrive Analytics shows the array of reasons consumers have so far not adopted broad-based mobile wallets. Among them are security issues and a perception that payment cards are easier.
Several of the published reports about Apple’s payment plans assert that its Touch ID system will be invoked for both security and ease of use. Apple has more than 500 million active credit cards on file with iTunes (many more than Amazon, which is also in the payments race). Accordingly and for quite a long time analysts have anticipated Cupertino would enter the payments arena.
Apple has an almost unique ability to “make a market.” Its launch of iBeacon, for example, has brought awareness to and accelerated the adoption of Bluetooth Smart technology for a range of purposes. Beacons can also be the basis for in-store payments.
If it does announce an NFC chip in the iPhone 6 Apple could thus popularize and educate consumers about NFC-based mobile payments, which would in turn give new life to chief rival Google’s mobile wallet.
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