Google (GOOG). The name itself represents a powerhouse of change, innovation, and revolutionary ideas. The Company is reinventing the way consumers interact with their products. The release of a cloud based mobile payment system will change the face of the world and commerce as it is known today. This will impact the world economy for the foreseeable future and will force vendors to re-evaluate and revamp their selling strategies. The only real question is, “What role will Google’s initiative have in the long term changes that this technology brings?”
The Future of Commerce
Photo credit: Nemo's great uncle, Flickr.
Imagine walking into a store, taking an item off the shelf, and walking out. The payment is processed automatically, charges are added to your account and you never have to waste time at a cashier. This is the path that Google is paving with its new innovative payment technology. It is now possible to take out the Nexus S 4g, open the Google wallet application ,and put it against a MasterCard Paypass card scanner at your local Jamba Juice, Office Max (OMX), Subway, Macy’s (M), or any of the hundreds of thousands of other participating vendors then simply walk out of the store. This is possible because of the near field communications (NFC) technology that the android application utilizes, which communicates with card readers when placed against a Paypass card reader. The simplicity of the application is nothing short of stupefying and the possibilities for the technology to evolve and mature in the future are nearly limitless.
The Current State of Google Wallet
Photo credit: yoshinari, Flickr.
The application is on the market exclusively for Sprint (S) on the Nexus S 4g and works only locations accepting Paypass. However, the search giant will be expanding their licensing agreements to a plethora of other companies. As in the past, Google has no intentions of limiting their services, or even making the application anything other than a free, open platform application. The strategy of Stephanie Tilenius (Google’s VP of Commerce) wishes to create an “open commerce ecosystem” that is supported by all major credit cards and is not limited to any single cell phone or service provider. Google has openly stated that they want other companies to build off of their initiative, mostly because of their Secure Initiative which is their encryption for privacy of user information in place. The application has been criticized as being less than seamless (mainly because of the deficiency in the Paypass readers), but the technology has arrived and the building blocks for the technology’s future are in place.
The Market Impact
Photo credit: imtfi, Flickr.
Possibly the most meaningful impact that Google Wallet will have is on the advertising and marketing communities. Google offers will be Google’s application for deals, coupons, and offers that will inform you of promotions based on your location. Say hello to the age of location based advertising, the ability to view and compare the deals of local vendors, and coupons that do not have to be cut out of magazines or newspapers. Local-targeted advertising may well be the future of major marketers, and companies like Living Social and Groupon are sure to take advantage of the opportunities within this new technology. There were major spikes in Groupon’s daily reach and attention metrics on the 19th and 20th of September, coinciding with the release of the android application.
The success of the Smartphone payment system could mean big things for internet based promotional companies. Mastercard.us (MA) has also seen significant increases in its daily reach metrics because of Google’s revolutionary product, showing that people are interested in actually using the cloud based wallet, rather than just the buzz that the product has created.
The application is obviously having a large impact upon consumers in the United States, but foreign economies are seeing the impact as well. The application has been a very popular search term outside of the US in the past year. Some of the leading non-US countries interested in the technology are Singapore, New Zealand, and India, proving that this application will have a profound effect on international commerce. These are just a few examples of how Smartphones are changing the world faster than ever. The creation of a cloud based payment system creates possibilities that are nearly endless for the global marketplace.