Almost a year after the initial release of Google Wallet, the NFC-based payment system is finally catching steam, and not a moment too soon.
In the past month the number of Google Wallet users has more than doubled, with the primary reason being the newly released cloud-based version of the application. The latest version of the application now allows for any major credit or debit card, from Visa, MasterCard, American Express, and Discover, to be linked to a user's Google Wallet account.
Furthermore, Barclaycard became the third issuer to decide to work with Google Wallet, and the second, Discover being the first, since the adoption of the new system.
The timing of this new version and increased interest in Google Wallet could not have been better for Google. They have definitely been feeling the heat in recent months, with their number of competitors in the mobile sphere set to increase.
C-Net.com wrote a piece about Merchant Customer Exchange (MCX), a mobile-commerce company that includes industry giants such as Best Buy, Target, Wal-Mart, and Lowe's, was recently formed in hopes of being a major player in mobile payments. MCX promises to work on “virtually any Smartphone”, and with the annual sales of the companies who have signed on being approximately $1 trillion dollars, it is set to be a major Google Wallet competitor.
PayPal has also developed as a formidable rival for Google Wallet because it does not revolve around NFC. Whereas Google Wallet has to worry about only being accepted by retailers who use NFC, the PayPal application uses a unique barcode that can be scanned in order to pay.
But the application that poses perhaps the biggest threat to Google Wallet is Isis, a joint-venture from Verizon, AT&T, and T-Mobile. Isis will use also use NFC, and they have already received the support of MasterCard, Visa, American Express, and Discover. However, Isis recently announced that they were delaying their release, and this may have bought Google Wallet the time it needs.
With all of these outside factors, the decision to implement this new system was definitely necessary, and, honestly, overdue. Google Wallet's previous technology was way too restrictive to allow for the number of users to grow, and would have eventually rendered the application obsolete.
Originally users needed to have a Citi MasterCard or a Google Prepaid Card to make use of the application. This format allowed for too few users because while it is not a major hindrance to purchase the prepaid card, it made the process too complex. Consumers are always looking for the quickest and simplest method possible.
Only making this problem worse was the fact that Google's competitors had major industry backing. With such strong opposition and only Citi's support, things were looking bleak for Google Wallet.
Now that Google Wallet has simplified everything, their application has gone from potential failure to leading competitor. They can only expect the number of issuers who will want to work with them to grow and as NFC becomes more integrated, the number of Google Wallet users will only continue to rise, while giving them more leverage over Square and PayPal. The recent doubling of users will only prove to be the beginning.
Also, this sudden increase in users will place the pressure back on their competition. Depending on how long it takes for MCX and Isis to be released, Google may have enough time to corner the market.
In addition to simplifying their system, the new version of Google also did a great job of addressing one of the chief concerns that consumers have with NFC, security. Users can disable their phone's Google Wallet account online, if they ever lose their phone or if it is stolen. This is a major development because it allows for users to feel they have the same sense of security with the application that they do with a credit card. And it will only add another reason to shift to mobile.
Do you think that you will try out Google Wallet's new version or would rather wait for one of its competitors to be released? I'd love to hear your opinions- post your responses below!