Google Wallet Poised To Launch
Google Inc. may launch its much-hyped Google Wallet as early as this week, according to a number of reports.
The company announced its mobile-wallet venture in late May with partners that include MasterCard Worldwide, Citigroup Inc., Sprint Nextel Corp. and First Data Corp. It has since field-tested the payment option in the San Francisco area.
Google officials so far have not confirmed the launch date, but analysts agree it appears to be imminent.
"It looks to me like Google is about to launch its mobile-wallet service, and while igniting a new product like this is always hard, Google seems to be putting a lot of energy into it," Todd Ablowitz, president of mobile payment consulting firm Double Diamond Group, says.
MasterCard chief executive Ajay Banga told American Banker on Thursday that the Google Wallet launch was "a couple of weeks away."
He added that he expects widespread consumer adoption of mobile payments to take years.
Despite swirling interest in mobile-wallet concepts, only a relatively small group of consumers will be eligible to use Google Wallet initially, analysts note. However, Google promises on its website that the payment application soon will be available at "hundreds of thousands of merchants."
Competition from other mobile-wallet concepts is rising. PayPal Inc. this month said it plans to add a smartphone-based payment option to its arsenal.
Isis, which late last year announced plans to develop a mobile-payment venture with Discover Financial Services, has since signed on Visa Inc., American Express Co. and MasterCard as participants.
But Google Wallet may have a significant advantage because it appears to be coming to market first, analysts say.
Google Wallet centers on an application users may download to Android smartphones. Initially, consumers may use the application only with a Nexus S 4G by Google, available from Sprint.
The first batch of participants also must have a Citi MasterCard credit card equipped with MasterCard's PayPass contactless technology or a Google Prepaid card, which consumers may apply for online. Google says other banks will join the effort eventually, but it has not disclosed further details.
Merchants accepting Google Wallet payments also must accept contactless payments, and only a fraction of North American merchants do.
MasterCard says it has 300,000 merchant locations enabled to accept its PayPass payments out of 32.7 million worldwide, and about half of them are in the U.S.
Google says on its Google Wallet website that it is "easy" to set up a Citi MasterCard with the technology and provides a link for consumers to see if their card is eligible for the service. Consumers also may apply for a Citi MasterCard on Google's site.
Google also invites visitors to sign up on line for its Google Prepaid card, which it will preload with $10 in value. Consumers pay nothing to add funds to Google Prepaid card accounts until the end of 2011, the website states.
Google "doesn't take a cut of transaction fees" and does not charge banks or payment networks to participate in the scheme, the company notes on the Google Wallet website.
Mobile wallets may take time to emerge, but most banks and payment networks are making sure they will not be left behind, Aaron McPherson, practice director with IDC Financial Insights, says.
"I suspect a lot of banks have unannounced deals related to mobile payments in the pipeline," McPherson says.