Sunday, June 12, 2011

Google Wallet - A Credit Card In Your Phone

Different customer loyality cards (airlines, c...Image via WikipediaGoogle, Inc. has debuted an new application called "Google Wallet". This application allows consumers to use their phones to pay for products and services. It would eliminate the use of credit or debit cards. Google Wallet is set to launch this summer and allow the company to join in on the lucrative business of digital credit cards.

All the major cell phone manufacturers are rolling out new handsets that will include the electronics to allow you to pay for groceries, movie tickets, and restaurants by a simple wave of your phone over a digital sensor.

Google is jumping in on this technology with both feet because the profits from handling credit transaction will be a big profit center for the company. Add to that the growing world of local offers and coupons. Services like Groupon and local coupon companies will have a better way to link their products to consumers. Businesses will be well poised to link purchases, digital coupons, and location based advertising to everyone with a smart-phone.

Google said by 2014, it expects purchases made on smart-phones to quadruple to $630 billion dollars. Don't feel bad for Visa and MasterCard, they still will process about $6 trillion worth of credit card transactions annually. But I wouldn't be surprised that they are looking over their shoulder to see an approaching competitor where there wasn't one before.

The way the phone works is that they have something called near-field communication (NFC). This is a radio technology that allows phones to talk to credit card terminals. Using built-in microchips, the phones can conduct digital conversations with credit card reading devices. The phones will allow consumers to use coupons or loyalty cards, pay for goods and receive a digital receipt all within a few seconds.

Thanks to this new service Google will streamline the whole consumer point-of-sale process. The process should benefit the consumer. What's the positives and negatives to this new product.


  • This system carried out further would just about eliminate your purse or wallet completely. No need to carry anything but your phone to go shopping. Why not digitally store your drivers license, AAA card, and health insurance card all in your phone.
  • Your coupons and loyalty cards could all be in your phone, eliminating the need to carry those things around.


  • Google will have your shopping information. Along with your location where you shop. Plus the frequency and time. They will know all your purchases no matter where or when they occur. Whatever you purchase, they will know.
  • What if your phone is lost or stolen. You can't do your shopping, you will have to have a credit card or cash as a backup.
  • If your battery dies your stranded with no way to pay.

This new technology will take a while to catch on. It seems like just a more difficult way to perform a simple task. Credit cards are just a piece of plastic with a magnetic strip on the back, real simple. It reminds me of the same battle 3-D TV still has, finding  a way to be as easy to watch as regular TV. Sometimes new tech just makes things more complicated.

1 comment:

  1. For those who are paranoid about privacy, there's nothing more private and anonymous than cash.


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