New Google Wallet Plays Up Loyalty And P2P Payments, Downplays NFC

Google Inc. on Tuesday unveiled a new mobile app for its Google Wallet that emphasizes the wallet’s loyalty and person-to-person payments features that in the past had taken a back seat to its point-of-sale payment capability based on near-field communication (NFC) technology.

The app is now available to all smart phones that use version 2.3 and higher of Google’s Android operating system, the leading mobile-phone platform. Previously, only NFC-enabled smart phones could use it, and those phones, while growing in numbers, have been relatively scarce. But Google says 29 smart-phone models sold in the U.S. now support NFC, including many of Samsung’s popular Galaxy models.

Google Wallet users, however, still need an Android NFC phone if they want to pay for purchases in stores with their devices. The wallet facilitates contactless, so-called tap-and-go payments at NFC-enabled POS terminals.

In contrast to the fairly limited boost the app might give to NFC payments, the new wallet could give a big lift to mobile P2P payments. Until now, P2P payments were an option through Google’s Gmail email service, but only on desktops. “Now you can send it on your phone,” a Google spokesperson tells Digital Transactions News, adding that Google is gradually expanding the P2P service to all Gmail users.

A sender can transmit a payment to anyone with an email account through the mobile app with a few taps on the screen and by entering the recipient’s email address. There is no cost to the sender if the payment is funded with a bank account or a Google Wallet balance. Transactions funded by a credit or debit card incur a fee of 2.9%, with a 30-cent minimum.

The new app also could greatly expand the number of consumers who take advantage of merchants’ loyalty programs, offers, and electronic coupons available through Google Wallet. Consumers can enter loyalty- account data into the wallet by using their smart phone’s camera to scan the bar code on a plastic loyalty card, or by typing the card number into the app.

“The next time you’re at the store, you can earn points for your loyalty program by scanning the app at checkout,” Peter Hazlehurst, Google Wallet director of product management, said in a post on the Google Commerce blog. Consumers can join the loyalty programs of Alaska Airlines, Belly, and Red Mango within the Google Wallet app to view their loyalty status and rewards-point balances. Upcoming partners include Avis Car Rental, BJ’s Restaurants, Cosi, Hard Rock International, InterContinental Hotels Group, Marriott International, Raley’s, and The Body Shop, Hazlehurst said.

In addition, Google Wallet users can view and redeem offers through the app that they’ve found in the wallet’s sister programs and apps such as Google Maps, Google Search, Google+, or Google Offers.

Google Wallet has had a troubled history, but the new mobile app shows it’s finally on the right track, according to mobile-payments researcher Rick Oglesby, a senior analyst at Boston-based Aite Group LLC.

“This is what they should have done a long time ago,” Oglesby tells Digital Transactions News by email. “Previous versions focused on payment capabilities where this version focuses on loyalty and offers. Google is a powerful marketer commanding lots of consumer attention through search, Gmail, and Google Maps. The integration of these solutions with the wallet and offers capabilities creates more compelling reasons for consumers to use the wallet app.”

Oglesby says an Aite survey of 491 small-to-mid-size merchants last spring about what they expect to get out of mobile commerce and marketing services found that “better consumer loyalty was priority number one for merchants, so Google seems to have hit the right mark when investing in improved loyalty solutions within the wallet.”

He adds that leveraging Android apps and Google’s most popular services is the right way to expand Google Wallet. “Building out the NFC ecosystem is not.”