Google Mobile Payments Muddies the Water

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Following on the heels of Square unveiling its mobile payments system, Google is holding a media event tomorrow where it is expected to reveal details of its NFC-based Google Mobile Payments. The chaos of rival mobile payment systems makes it difficult for businesses to know which horse to bet on, and could slow adoption by both merchants and consumers.

According to a report from the Wall Street Journal, Google will announce a pilot program launching in New York and San Francisco, with an eventual broader rollout to additional locations. The report cites a person familiar with the matter, and says that initial participating retailers include Macy's, American Eagle Outfitters, and Subway.

Mobile payments may be the future, but right now its more of an embryonic pipe dream
As if that is not limiting enough, the Google system is being launched with Sprint. So, if you happen to be one of the 47 people who A) live in New York or San Francisco, B) use Sprint as your mobile service provider, C) invest in an NFC-equipped smartphone, and D) shop at Macy's, American Eagle Outfitters, or Subway--you're in luck!

I agree with the sentiment of Jared Newman, who says not to get too excited about NFC payments just yet. The concept has merit, and I am confident it will catch on eventually, but there are a number of hurdles to cross before it can become mainstream. It will happen, though. Just as gas stations accepting credit cards began as a novelty and eventually became a requirement of doing business, so too will mobile payments.

So, what's a small business to do?

Cool Your Jets

It makes for compelling headlines, but we are a long way from the day where the general population will abandon cash, leave their wallets at home, and expect to to walk into any retail establishment and make a purchase using a smartphone. There is no rush for you to try to guess which mobile payments platform will win, or to make any investment in mobile payment systems just yet.

Build It, and They Will Come

That said, the underlying technology that drives NFC is based on a standard. If you invest in point-of-sale payment terminals that can receive and process payment via NFC wireless signals, then you will be prepared no matter which of the competing NFC payment backends eventually comes out on top. Granted, you will still eventually have to choose the services you want to sign up for, and in most cases there will be some cost involved, but if you at least get the hardware in place you are one step ahead of the game.

Hedge Your Bets

You don't need to choose between NFC or the Square mobile payment system either, really. Why not do both? As a business, what is most important is that you have the flexibility to complete a transaction and take your customer's money no matter which method the customer chooses to use. Signing up for Square doesn't cost anything--other than maybe an iPad if your business doesn't already have one.

For right now, it is more important to just be aware that mobile payments are coming, and to start understanding how--or if--you plan to incorporate mobile payments into your business. Just keep an eye on the industry so you don't miss the boat and end up playing catch up when it does go mainstream.

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