Google has teamed up with US telecommunications carrier Sprint for their entrance into digital payments and NFC technology, which is to be announced on May 26th. The service has many talking on the fracturing of the payment market, but the launch places Google leaps and bounds ahead of another rival model, Isis, powered by the three other major US wireless carriers. Giving mobile phone owners the ability to convert their cell phones to a mobile wallet is something that has been going on for years in the US and looks ready to become a reality this year.
With confirmed participating outlets like Macy’s and Subway, Google is shouldering all the funding for the Near Field Communication (NFC) terminals that will be used by the merchants, pairing it with the NFC-capable Sprint Nexus S that runs on the Android OS. Rumors are circulating that the iPhone 5 will also contain the NFC chip, however, there are no further details on the issue including whether it would be compatible with Google’s NFC terminals. It is also this issue that has industry watchers speculating of a severely fractured market as more and more ways to pay digitally are being created, and each of these methods have their own backers who want to be the market dominator. An example is the Square mobile payments on iPad release of the Square Register that is adding to the number of players in the mobile payments.
Google’s system is seen to be launched with good timing, as NFC payments are having a slow roll out, and would be way ahead of its competitor Isis. Isis is a collaboration between AT&T, Verizon Wireless, and T-Mobile to create their own NFC-powered purchase system that they will test out in mid-2012. The search giant’s version has been publicly shown as early as November 2010 when CEO Eric Schmidt demonstrated it at the Web 2.0 Summit using the Android Gingerbread OS. With the announcement tomorrow, they are taking the next step in rolling it out.
The platform is said to be able to bolster local commerce as it offers more detailed customer data to the sellers with targeted ads and discounts to nearby mobile phone users. By swiping or tapping the phone onto the terminal, the customer is able to pay, and the purchases are processed through the user’s credit card.
Visa and fourteen banks have mentioned their plans for an NFC-powered digital payment system that they want running in the US and Canada. Analysts have claimed that it is Visa’s approach that has the most extensive reach among those who are planning their systems in the US. Asia’s digital purchase methods far surpass those of other continents and have been around for years while other countries are just now preparing to turn them on.
Google and Sprint will be piloting their model in New York, San Francisco, Los Angeles, Chicago, and in Washington, DC.
