Phones

Google Wallet Lets You Tap and Spend

Citigroup will also provide Google Wallet users with its Citi MasterCard, but Google wisely started the rollout with its own Google Prepaid Card, which users can load with funds from other cards or sources.

If that weren't enough inducement to attract early adopters, Google also decided to give each Google Wallet early adopter $10 on the prepaid card as mad money. Full disclosure: I owe Eric Schmidt a Coke, a grilled chicken sandwich and M&M's. (I still have $2.36 of the $10 left to spend.)

As another possible inducement, Best Buy over the weekend lowered the price of the Nexus S 4G on Sprint to nothing for customers who sign up for a standard two-year service contract. Users can presumably take the $100 or so saved on the phone and load it on a prepaid card.

Before I go overboard listing amazing qualities of Google Wallet, I'm going to have to see what fees, if any, I'll be charged for each transaction. Right now, the biggest fees for credit cards users are paid by merchants, even those that have nonetheless embraced Google Wallet as a way to speed up lines at the cash register or to engage customers in loyalty programs.

Google Wallet Lets You Tap and Spend
Cynics have said that NFC smartphones are no better than NFC-based smartcards, which can be used at the same payment terminals to pay for purchases via credit or debit card accounts. But smartcards are one-way tools -- shoppers can only use them to make payments -- while smartphones will also be able to receive special offers (which will be based on users' shopping histories and current locations). If retailers do start to send coupons and otherwise offer special deals to people who pay with their smartphones, demand for NFC-ready devices could jump.

Avivah Litan, an analyst at Gartner, said on Monday that she has recently helped prepare a new consumer survey that confirms that consumer acceptance and interest in mobile payments is "still very small" in the U.S. That low level of interest means Google will have to make sure the customer experience with Google Wallet is superior if it hopes to see further adoption, she said. That means there should be no problems in getting the Google Wallet update to a phone, and no problems in finding eligible stores or making payments work.

Two other analysts said Google Wallet is still in its infancy and is bound to grow steadily. Competing mobile payment networks are also in the works. One of those is Isis, which is backed by the other three major U.S. wireless carriers, AT&T, Verizon Wireless and T-Mobile USA.

Mark Hung, an analyst at Gartner, said Google Wallet in its current form is probably a beta version, even though Google didn't launch it with the "beta" moniker.

"Google couldn't put 'beta' on Google Wallet because with payments, having that label would scare people away," Hung said. "However, in reality, Google Wallet's maturity at this stage is probably the same as any other Google app that was in beta before, including Gmail, Google+ and more," Hung said.

Google officials wouldn't respond to requests to comment on the success of the Google Wallet launch or how many phones have the app installed. Sprint referred questions to Google, and MasterCard didn't respond to a request to comment.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed . His email address is mhamblen@computerworld.com.

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