Monday, October 22, 2012

Google Inc(NASDAQ:GOOG): Mobile Payments Won’t Be An Overnight Success

As per the head of Google Inc(NASDAQ:GOOG)’s payment unit, mobile payments with Google Wallet may be growing fast but the wide acceptance of NFC in the US is taking time.

The number of near-field communication transactions with Google Wallet doubled within the first six months after the launch of the cloud-based version on 1st August. Google’s vice president of wallet and payments, Osama Bedier said that the trend has continued. He did not mention as to how many payments that is amounting to. Google has never cited an exact number of transactions and Bedier seems to be sticking to that practice.

Bedier said in an on-stage conversation with Rajeev Chand from Rutberg & Co. that Google thinks it is making a huge difference on transaction volume. He also said that mobile payments would not be an overnight success. It would take 3-5 years time to become prominent among users.

US customers have shown small interest in mobile payments since the country has an advanced credit card system, as said by the analysts. Payments with NFC need software and hardware in both point-of-sale and handset terminals. Additionally, there are three ecosystems competing with each other having different set of strong backers.

Apart from the NFC payment technology of Google, there are systems that are being promoted by popular mobile operators and retailers. The ISIS consortium includes AT&T, T-Mobile USA and Verizon Wireless. It plans on launching its platform in two cities on Monday. A host of stores including 7-Eleven, Walmart and Target formed their own mobile payments network in August, named Merchant Customer Exchange.

Bedier said that the problem lies in having too many ideas and unsolved issues. There is for several solutions but every solution needs to have a value proposal. Any good mobile payment system requires to help customer save time and money and make transactions seamless. 

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