Search giant Google, last week, officially introduced Google Wallet, a new application that allows consumers to pay for products using phones enabled with near-field communication [NFC] technology. 

 

Beyond a simple payment device, Google Wallet allows consumers to store their personal data, credit card information, and loyalty/gift cards in the application. Google hopes that Wallet will eventually be used to house everything from airline boarding passes to concert tickets. At launch, the program can be tethered to Citi-branded Mastercards and Google payment cards that can be replenished via any debit card. 

 

For solution providers, Google Wallet opens up opportunities to provide additional support and upgrades to existing point-of-sale customers. VeriFone announced that it would serve as the gateway technology between the POS and Google Wallet. 

 

“Google is one of the first companies to go public with a strategy around electronic wallets interfaced into POS environments,” said Paul Rasori, senior vice president of global marketing at VeriFone. “This type of application really requires some form of consumer-facing piece of equipment [that should be provided by a VAR].”

 

VeriFone systems can be upgraded to accept NFC communication from a mobile handset, and VARs and ISVs will be needed to integrate the software that communicates between the application on the phone and the consumer-facing device. 

 

What’s unique about Google’s system is that it creates two-directional communication in which the point of sale can send information back to the phone. Google Wallet will allow retailers to target consumers with specific advertisements that can be redeemed with mobile coupons through the NFC system. Depending on the level of functionality that the retailer wants to offer, VARs and ISVs will have to make modifications to cash register software to take advantage of certain kinds of features, including mobile coupon redemption and geo-targeted advertisements. 

 

Google is the biggest name working with NFC technology, and comparisons are being made to Wal-Mart’s leap into RFID back in the early 2000s. However, solution providers and vendors are hoping that Google Wallet makes a bigger splash than Wal-Mart’s RFID initiative. 

 

The Google solution is currently being piloted in five major cities across the United States with some major retail backers.  The biggest challenge will be getting the consumers to buy into the technology. Visa and Mastercard implemented contactless cards in the past few years, but consumer adoption has been tepid at best. 

 

“Google has rightly put the focus on the consumer to try to create additional incentives for them to use the system,” Rasori said. “Most consumers aren’t that excited to just be able to use their phones to pay. Google’s emphasis on an offer platform that provides consumers with benefits beyond payment processing, [which means that] retailers’ marketing departments can get much more creative in terms of doing one-to-one marketing.”