Google Unveils Cell Phones that Double as Digital Wallets - Smar - DC News FOX 5 DC WTTG

Google Unveils Cell Phones that Double as Digital Wallets - Smartphone Zone


Google Inc. on Thursday showed off its plans to create a digital wallet, allowing consumers with Android smartphones to pay for goods and services or receive coupons and offers by waving the device in front of a special reader at the checkout counter.

The web search giant took the wraps off Google Wallet and Google Offers, which will launch in the summer. The platform is powered by a technology called near-field communication, now found on some wallets and select phones, which is compatible with newer point-of-sale terminals.

Pete Erickson from Disruptathon joined us to talk about Google’s new initiative and other tech happenings.


Google is the latest company to attempt to make its mark in mobile payments, a potentially lucrative area that has drawn not only traditional banks and credit card companies, but also new entrants such as the wireless carriers and handset manufacturers. Mobile payment is attractive because it is seen as increasing the rate of purchases by consumers. But the bigger opportunity lies in delivering targeted coupons and advertisements through the technology.

"Google's interest here isn't in the payments, it's in the data that underlies the complete chain of commerce including consideration, promotion, transaction details, coupons, and receipts," said Charles Golvin, an analyst for Forrester Research.

The lure of mobile payments has for years caused a shift in alliances and disputes over how to roll out a broadly implemented system. Google, for instance, has formed partnerships with MasterCard Inc., First Data and Citigroup Inc. to roll out its system.

Google said its wallet service is free to use, and it will make money off the Offers side, which acts like Groupon and takes a cut from consumers who redeem the coupon. The company also plans to use location and transaction data to provide targeted offers to customers who opt in for the program.

Google will also act as merchant of record for the promotions it will offer through the phone, taking a cut of that transaction, according to Stephanie Tilenius, vice president of commerce for the company.

Google is also teaming with Sprint Nextel Corp. as its carrier partner and is using the Nexus S, made by Samsung Electronic Co. Ltd., which is equipped with an NFC chip. Sprint sells the Nexus S 4G, which it calls one of its bestselling phones. Verifone Systems Inc. is making the checkout terminals and NFC readers, while VIVOtech Inc. is also supplying NFC readers. NXP Semiconductors NV is supplying the NFC technology.

Google also listed 15 retail partners, including American Eagle Outfitters Inc., Macy's Inc. and Walgreens Co.

The company, however, stressed that it is building an open platform, and expressed a willingness to work with rivals such as Apple Inc. and Research in Motion Ltd., which are both looking at NFC technology.

While field trials are occurring now, Google Wallet will launch in New York and San Francisco, and will expand nationally in the coming months. Google Offers, which is a daily discount sent to the phone, will begin in Portland, Ore., New York and San Francisco. The discounts are designed to be redeemed using the phone to pay. MasterCard said there are 100,000 merchants ready to accept NFC payments.

"We have enormous opportunity in front of us to redefine commerce and payments," Tilenius said. She emphasized that the announcement represents the start of a larger rollout of mobile payments.

"It's important to realize we're just getting started," she said during a press conference Thursday. "This will take a while to come to fruition."

Users can place multiple credit cards on the phone, and eventually add gift cards. They can also turn the card off to avoid accidentally making a payment. Tilenius touted the system as more secure. "It's a wallet you can lock," she said.

The platform also allows consumers to create a card on the fly, and will eventually offer the ability to send digital copies of receipts back to the phone. Google is also considering game dynamics, and will allow consumers to tap posters with NFC chips to get coupons. It is all part of what Google calls a "mobile, local" strategy. The vision is to have the phone ultimately store all the information.

Copyright (c) 2011 Dow Jones & Company Inc.

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