9/19/13

Strange bedfellows: Google unveils an Apple version of its wallet

Opening up a previously limited mobile offering makes sense, one expert says.

Bill Siwicki , Managing Editor, Mobile Commerce

Google Inc., maker of Android, the most popular mobile operating system, today launched a version of its newly updated Google Wallet app for mobile devices running Apple Inc.’s iOS, the second most popular mobile operating system.

Like their Android counterparts, iOS device users are able to use the app to manage and redeem loyalty cards, monitor and receive offers from merchants, and make person-to-person mobile payments. Apple users cannot, however, make in-store mobile payments with the app. Only consumers with one of 29 Android smartphones with built-in Near Field Communications, or NFC, wireless tap-and-go technology can do that. Apple devices do not feature NFC chips.

The move by Google to open its wallet to Apple users shows how drastically Google’s wallet strategy has changed since its launch in May 2011. Initially Google Wallet was focused on in-store NFC mobile payments. But NFC has failed to catch on with consumers and merchants. For merchants, it’s an expensive proposition to upgrade in-store checkout systems. And no one can blame consumers—there aren’t many smartphones with NFC chips built in. But even more to the point regarding mobile payments overall, it’s still much simpler for consumers to scan a credit card.

So in November 2011 Google expanded Wallet’s scope by rebranding its PayPal-like Google Checkout alternative payments service to Google Wallet. That got more online shoppers familiar with the Google Wallet brand when they saw it on the checkout pages of many online and mobile retailers. But that did little to advance the concept of a mobile wallet.

Earlier this weekGoogle launched an overhauled version of its Google Wallet app for Android, making it available to the majority of Android devices and adding features. Now comes the Apple version of the same app. Google made no comments through its blog or other official channels addressing the significance of it opening up its wallet program to Apple users, and it did not respond to a request for comment. Mobile payments experts, however, say the Apple move is part of a massive shift in strategy and a wise move by Google.

“The technology-centric, Android/NFC approach created limitations when Google needed to be expanding opportunities, so going multiplatform just makes sense,” says Rick Oglesby, senior analyst at Aite Group, a mobile payments consulting firm.

Oglesby says Google has “greatly improved” its mobile wallet strategy for several reasons. In addition to making Google Wallet available to Apple users, Google is making its wallet a complement to other Google services and less of a standalone product, he says.

“This is tremendously important because consumers aren’t really looking for a new wallet,” he says. “Consumers use Google to search and shop regularly across a wide variety of devices. Shoppers love deals and they need to pay, so having a product that leads with shopping and deals and ends with payment is a better overall solution than a standalone payments solution.”

Another way Google has improved its strategy, Oglesby says, is by placing a greater focus in the app on loyalty cards. For retailers, mobile technology and customer loyalty go hand in hand, he says.

The new Google Wallet iOS app is available now in Apple’s App Store.

Topics:

Aite Group, Apple, Google, Google Wallet iOS app, m-commerce, Mobile, mobile commerce, mobile payments, mobile wallet, near field communications, PayPal, rick oglesby, smartphones

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