ePayments Week: Google Wallet debuts

Google Wallet launches on the Nexus 4G, consumers not yet interested in mobile payment, and a new look at Android users.

Here’s what caught my attention in the payments space this week.

The mobile wallet is here

Google WalletGoogle Wallet officially launched this week with payment partners Citi and MasterCard on board and three other credit card networks (Visa, Discover and American Express) waiting in the wings. Version 1.0 is pretty much what Google said it would be when it announced the service last May. Google is launching it first on Sprint’s network, and for now you need to have Samsung’s Nexus 4G — though there are several other NFC-compatible devices in use today and more coming soon. You also have to find a MasterCard PayPass terminal — typically found in taxis, fast-food restaurants and convenience stores — to tap and pay. (If you’re looking for the technical specs on how that works, MasterCard’s site has a handy interactive that shows how tapping the phone emits a beep from the terminal.)

Payment with the phone is only part of the value proposition; Google knows that won’t be enough to convince consumers to use it. The integration of payment with rewards, loyalty programs, and coupons is just as important — as this spoof video of the “first Google Wallet customer,” lifted from the “Seinfeld” archives, makes clear. It’s a small start, with only a narrow slice of the smartphone user base able to tap into it. But who can doubt the promise of one of the Google engineers starring in the intro video when he says, “We’re constantly working to improve the wallet.”

It’s worth noting that PayPal president Scott Thompson demoed their point-of-sale solution last week, emphasizing that PayPal isn’t waiting for NFC and is instead considering multiple payment options, including bar codes (like Starbucks) and PIN confirmations (as with direct billing). Earlier this summer, Ogilvy & Mather’s Mobile Shopper survey found that far more consumers trusted PayPal to handle their mobile payments than Google (34.3% versus 19.5%). If Google’s challenge will be to earn consumer trust, PayPal’s will be to remain visible as Google and its high-profile partners push their solution.

Mobile payments deemed “very unimportant” by some consumers

If Sprint fails to report a wave of new customers who suddenly must have the Nexus 4G, it will come as no surprise to the folks at Lightspeed Research who reported this week that mobile payments are “very unimportant” to more than half of all smartphone users. Only 15% said that mobile payments were somewhat or very important. An article in American Banker quotes Jim Smith, president of Blue Dun consultancy, saying that consumers are basically satisfied with their current mobile payment solution, the credit card: “The killer application in mobile payments hasn’t happened yet,” Smith said. (Presumably, he hasn’t seen Google’s “Seinfeld” parody.)

Lightspeed also reported that mobile app usage differs widely among customers of different credit cards and banks. Among the interesting differences:

  • Smartphone penetration is highest among American Express and HSBC customers — both at 37%.
  • Discover is the only issuer with more than 50% of its customers still using “basic mobile phones.” In line with this, they have the lowest penetration of smartphone users at 28%.
  • 37% of Wells Fargo credit card customers said they have downloaded the Wells Fargo mobile app — the highest penetration among the card issuers analyzed.

Who’s that Android user?

Tech blog Mobile17 published a nice infographic on Android users, drawing on data from Nielsen, AdMob, Hunch.com, and others. One of their sources was a similar graphic from Mostly Blog published back in August, contrasting Android and iOS users. Among the more interesting findings in Mobile17’s graphic:

  • Android owners talk on their phones about 15% of the time. They’re on apps more than 56% of the time, not including email and messaging (19%) and web browsing (9%).
  • Android users are more likely than iOS users to be guys, more likely to be conservative, and more likely to be pessimists. They also are 80% more likely to have only a high school diploma (that is, no college degree) than iOS users.
  • That Samsung Nexus 4G you need to use Google’s Wallet? It’s not in the top ten most popular Android phones.

Of course, we can’t infer simple conclusions about demographics and preferences for Google’s operating system versus Apple’s without also taking into consideration that Android mobiles are offered (by multiple handset vendors) at lower price points than the iPhone — so, income may be driving that preference more than other factors.

Got news?

News tips and suggestions are always welcome, so please send them along.

If you’re interested in learning more about the payment development space, check out PayPal X DevZone, a collaboration between O’Reilly and PayPal.


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