Commerce Weekly: Google Wallet vs Apple Passbook

Google gears up to compete with Apple, a look at the effect of technology on currency, and a wallet competition roundup.

Here are a few stories from the commerce space that caught my attention this week.

Google prepares its Wallet to compete with iOS 6

Robin Dua, Google’s head of product management for Google Wallet, participated in a video interview (embedded below) this week to talk about Wallet features and plans. Technology reporter Cromwell Schubarth notes in a post at Silicon Valley Biz Blog that the future plans for Google Wallet look a lot like Apple’s newly announced Passbook that’s due to release in iOS 6 this fall. Schubarth quotes Dua:

“‘One of the types of things we’re trying to do is make it easy for airlines, transit providers, and other types of issuers of credentials to make it super simple for them to get their credentials stored in the wallet,’ Dua said. ‘That’s the goal. We want you to be able to leave your leather wallet at home and carry your phone and transact with that as your primary transaction device.”

Dua said they plan for the Wallet to hold credit cards, loyalty cards, IDs and things like boarding passes and transit passes. Very much like Apple’s description of Passbook.

You can view Dua’s interview in the following video:

As far as mobile payments are concerned, however, Google Wallet might retain its leg up on Apple. Earlier rumors of the next generation iPhone, anticipated to be announced at a rumored Apple event on September 12, indicated the phone would include an NFC chip, fueling further rumors that Apple would launch a digital wallet. This week, Brian Klug and Anand Lal Shimpi at AnandTech presented a compelling argument as to why it’s highly unlikely the phone will include NFC. Ryan Kim at GigaOm reports:

“AnandTech said given the reports that the next iPhone will have a metal backing, there will not be enough space in the non-metal window reserved for other antennas to support an NFC chip.”

Of course, an NFC chip isn’t necessarily required for Apple to launch a mobile payment product. Some analysts have argued that Bluetooth technology would make more sense.

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It’s not about the tap. It’s about the data behind that tap

Dan Rowinski at ReadWriteWeb took a look at the transformative effect technology is having on currency and the way people shop and pay for goods. He argues that major changes to our cash-based society will be “brought on by the two most fundamental innovations to hit the mainstream consumer since the advent of the Web: mobile and cloud computing.” He notes that, philosophically, the cash-to-digital road hasn’t been (and isn’t) easy:

“This notion of using a smartphone to pay has been criticized by many people (including us at ReadWriteWeb) as adding no value. There has been a lot of hype about NFC for the last couple years, but there is really no discernible argument that can validate that a tap is easier or more valuable than swiping a card. This is the crux of the argument against mobile payments: The transformation taking place is not necessary. For NFC in particular, it has been called a solution without a problem.”

Rowinski argues that the transformation to mobile payments does, in fact, add value — the value is in the layers beyond the transaction. “The value of the mobile wallet is the digital transformation of monetary and transaction data,” he writes. “When a consumer makes a purchase on a smartphone, the retailer knows who that person is, the mobile wallet provider gets information about what was bought when and where and by whom, and the consumer gets the value of electronic receipts and the ability to receive coupons, offers and loyalty rewards.” You can read more of Rowinski’s analysis here.

Wallet competition roundup

John Martellaro at The Mac Observer pulled together a roundup of the competition in the digital wallet wars this week, with breakdowns of all the major players: Google Wallet, Merchant Customer Exchange (MCX), Isis, Square, PayPal and V.me. Martellaro addresses a few of the hurdles facing mobile payment as well, including technology and security issues, but also points out what might be the biggest — and perhaps most overlooked — issue: consumer frustration. Martellaro writes:

“… there is also the issue of competition that will confuse and annoy customers. For example, it doesn’t appear that Google Wallet will come to iOS. As a result, banks, telecom companies, and merchants are in a much better position to work out the requisite details. On the other hand, a system from smartphone makers, because of the competing interests, would generate discord. This could explain why Apple hasn’t jumped in with ‘Apple Wallet,’ (other than its iOS 6 Passbook).”

On the other side of The Pond, Mastercard heated up the mobile payment competition in Europe this week, striking a deal with Everything Everywhere, the biggest telecom operator in the UK. The initial offerings will be a bit different from other services that charge purchases to registered credit cards or bank accounts. The BBC reports that, “one of the first products would be a service in which users pre-pay money into an account before being able to spend it via handsets equipped with near-field communication (NFC) technology.” Future plans, according to the report, include adding the ability to pay through a bank account with a mobile phone and a service to facilitate person-to-person money transfers.

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