Goodbye, cash. Goodbye, credit cards. Hello, Google Wallet.
Google launched its new mobile payment service, called Google Wallet, in New York on Thursday. Demonstrating on an Android smartphone, users can tap credit card icons on their phone and hover it in front of an NFC (near-field communication) device in stores and restaurants. Basically, instead of swiping a credit card, they could just wave their phones at check-out and the amounts would be deducted from their accounts.
Google announced San Francisco and New York would be the first cities to test their product, working in cooperation with MasterCard and Citibank. Consumers across the country will get to try it out as early as this summer.
According to the Associated Press, Google plans to make money by selling coupons and advertising that go along with the service. The company predicts it'll be the strongest form of advertising yet, appearing at the exact moment when shoppers are about to make purchases and might be swayed by discounts and competitor prices.
Mashable reports that iPhone and Windows Phone 7 devices are not yet compatible with Google Wallet, but they do plan to "work with all platforms especially if they build NFC into their hardware." However, the company couldn't provide any details or numbers, but did name retailers who have signed up, including Macy's, American Eagle and Subway.
Shortly after Google announced its new service, PayPal filed a lawsuit against the search engine giant, including two former PayPal executives who are now in charge of mobile payments at Google. The 28-page complaint alleges "misappropriation of trade secrets" and "breach of fiduciary duty."
TechCrunch reports Google was in negotiations for two years to have the eBay-owned payment company manage the new mobile service, but instead hired PayPal's Osama Bedier -- the same executive negotiating with Google. The lawsuit claims Bedier may have used knowledge of PayPal's own plans to launch mobile payments independently for Google's gain. Bedier had been with PayPal for nine years.
Meanwhile, Visa is working on its own pay-by-phone system with several large banks, including Bank of America and Wells Fargo. CNBC reports Visa's own virtual wallet will be commercially available later this year.
What do you think of Google Wallet? Could you see yourself replacing credit cards with smartphone payments?
by Geoff Herbert Syracruse.com May 27, 2011
Google Wallet replaces cash and credit cards for Android users; PayPal sues | syracuse.com