Will Google Wallet Affect Your Business?

Google officially announced Google Wallet and new features for it’s daily deal site, Google Offers, today. They’re looking to go beyond e-commerce, and make big changes to how physical retailers and service-providers collect payments and offer deals. There’s a good chance this could have an effect on your business.

What Is Google Wallet?

Google Wallet is an attempt to effectively store the contents of your wallet on your cell phone. For now, this only will work with specific credit cards, but is supposed to extend to all credit cards, drivers licenses, sports tickets, and the like.

Mastercard Pay Pass Terminal

The initial use will be to enter a credit card or two onto the system (on your phone). By tapping your phone against any Mastercard PayPass terminal, your card will be charged. There are already over 300,000 PayPass terminals, as Mastercard has been using them with their credit cards, little key fobs, and other devices for a while.

Google Wallet will require a cell phone equipped with a NFC (near-field communications) chip in order to pay at a PayPass terminal, which combined with the limited selection of credit cards, will keep it from being heavily used at first. But Google expects to increase the number of credit card partners, and NFC chips are expected to be in over half the phones produced by the end of this year. Also, the app, with its coupons, can be used even with older phones.

History suggests it will take a large portion of consumers a while to become comfortable with the system, despite its many security measures. On the other hand, there are always a few that are quick to jump on any new technology.

Coupons & Loyalty With Google Wallet

If Google Wallet was just another way to pay, it wouldn’t be a big deal. As a retailer, you get a new payment terminal and move on with business. The system is, however, much more ambitious than that. One of the biggest goals is to bring coupons and loyalty programs into Google Wallet,

Google showed a demonstration where a person found an American Eagle coupon online, and clicked a button that said “Save to Wallet.” It’s also possible to transfer coupons from physical advertisements to the phone with a single tap. When the purchase is made, the phone is touched to the PayPass terminal – the coupon is automatically applied, rewards program is updated, and payment is made. Google expects they will have receipts showing up automatically in Wallet in the near future.

Google Wallet & Your Business

Google stated specifically that they are an open company – Google Wallet will be free for retailers, and even small businesses can put offers and loyalty programs onto the system. It will be interesting to see how this is handled, but could be a great opportunity. My guess is that it may be similar to Square’s cash register program – allowing small companies to keep track of customer purchases, and get back in touch with prior customers, in much the way that most large businesses already do.

It seems very likely that deals and coupons placed on a businesses’ Google Places page will be easily enabled for Google Wallet for any merchant that supports the program. Google also made it clear that this would be available for Google Offers – which will be a great convenience compared to the constant printing required of any heavy Groupon user.

There will also be some form of advertising tied to this – which may be one way Google ends up making money. A comment was made that you could search for “lunch” and up pops a Subway coupon. If this is like a lot of other things the company does, Google will probably surface some popular coupons, along with some that have paid to be shown.

Although it will certainly take some time to have a giant impact, Google Wallet will be an interesting program to watch.

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