Google Wallet and Google Offers now are available to select smartphone users.
Kevin Woodward , Senior Editor
For retailers and consumers anticipating using Google Inc.’s Google Wallet and Google Offers service, the wait is over. The online search and advertising giant launched the mobile loyalty, coupon and payment services this week for consumers who own Android-powered Nexus S 4G cell phones on the Sprint network.
Announced in May, Google Wallet relies on Near Field Communication, a wireless technology that enables devices to exchange information—including encrypted payment card data—over a short distance. It will enable a consumer to pay for goods in a store by waving a smartphone with an NFC chip near an NFC-enabled terminal.
To tie Google Wallet to her smartphone, a consumer will either have to sign up for a Google Prepaid account or have a MasterCard-branded Citibank card that is eligible to participate in the contactless PayPass payment program. Google also is working with the three other card brands, Visa Inc., Discover Financial Services and American Express Co., which have made their NFC specifications available to Google in a way that “could enable their cards to be added to future versions of Google Wallet,” notes Osama Bedier, Google vice president of payments, in an official blog post.
Google Wallet has the ability to make a payment, redeem a coupon and earn loyalty points with a single tap of the phone against a contactless reader at some locations of American Eagle Outfitters Inc., Jamba Juice, OfficeMax and Toys ‘R’ Us Inc. Google says it will add more merchants to its Single Tap program, but would not provide a timeframe for doing so. Google Wallet also can store a consumer’s loyalty program information, but only for Single Tap merchants.
Google says Nexus S 4G owners can use the payment and offer applications at more than 140,000 merchant locations that accept PayPass, MasterCard Inc.’s contactless payment brand, including RadioShack, CVS Pharmacy, 7-Eleven and Foot Locker.
The wallet also has the ability to present deals through Google Offers, a daily deal service available now, but only at participating merchants in Austin, Texas, Boston, Denver, New York City, Oakland, Calif., Portland, Ore., San Francisco, Seattle and Washington, D.C. Google says more cities will be added, but would not say when.
Google is one of many vying to build a successful digital wallet program. Visa anticipates launching its own digital wallet this fall, and AmEx has Serve, an online and mobile digital wallet. PayPal, a unit of eBay Inc., also is working on extending its mobile payment capability into stores.
Google also faces Isis, a mobile commerce firm started by AT&T Mobility, T-Mobile USA and Verizon Wireless. Isis is expected to launch next year after tests in Salt Lake City and Austin.
The battle for the mobile wallet appears to be forming between Google and Isis, says Todd Ablowitz, president of consulting firm Double Diamond Group LLC. “Google is betting on Android and their search and advertising capabilities,” Ablowitz says. “Isis is betting on cell phone distribution.”
Despite the number of digital wallets expected to launch, retailers only will need to choose which offer program they want to participate in, Ablowitz says. “From an offers point of view, they’ll go after which version will be more effective in getting them traffic.” All four card brands support the same technical specifications underlying contactless transactions.