Digital Transactions Authoritative, insightful and timely information for payments professionals
Google Inc. released a trio of announcements on Wednesday concerning its Google Wallet mobile-payments application, but even taken together these did not add up to the major overhaul of the product that Google promised last fall.
Google’s news included: a Wallet-based person-to-person payments service that works with Gmail, Google’s e-mail application; a new application programming interface (API) that works with Android apps and allows online sellers of physical goods to take a payment from Wallet users in as few as two clicks; and an API that lets Wallet users more easily sign up for companies’ loyalty programs, store the loyalty apps in the Wallet, and then send information to those sponsors. This last API also enables users to store other so-called objects in their Wallet, including, for example, boarding passes.
Perhaps the most significant of the announcements, which came on the first day of the Google I/O developers’ conference in San Francisco, is the so-called Instant Buy API for Android apps. Designed for sellers of physical goods that already work with a payment processor, the API lets consumers checking out within Android apps to complete a purchase without entering cumbersome data such as an address for both billing and shipping. The API sends the Wallet user’s information to the seller with the user’s permission.
There are no fees for the service to the seller, Google says, since the search giant isn’t processing payments. Google adds that the API is aimed at reducing cart abandonment rates, which have risen as high as 97% on mobile devices, according to data cited by Google. The new API builds on Google Wallet API, which Google launched in October to allow payments to work faster on mobile sites.
Eleven sellers have already integrated Instant Buy. Some of these include: Airbnb, an online hospitality booking agent; Expedia; Priceline; Tabbedout, a mobile-payment system for restaurants; and Uber, a provider of car rides as an alternative to taxis.
For P2P payments, Google announced it has integrated Google Wallet with its Gmail e-mail service. Wallet users can send money to anyone, whether or not they are Gmail users, from their Gmail account by tapping their Wallet.
Transactions are free to the sender if funded with a Wallet balance or from a linked bank account. Payments funded with a card stored in the Wallet cost 2.9%. Settlement to the recipient is immediate from a Wallet balance and processed within minutes from a card account, while payments from a bank account can take up to 10 business days, Google says. Transactions are limited to $10,000, with a $50,000 cap over a five-day period.
To use the feature, the sender hovers over the “paper clip” icon within Gmail, clicks on a dollar-sign icon, specifies an amount, and clicks on “send.” Google says it is rolling out the new service “over the coming months” to all Gmail users over 18 years of age. It is designed to work only on desktop machines, but laptop and mobile users can access it at wallet.google.com.
With “Wallet Objects API,” companies can install their loyalty apps on users’ Wallets, and users can get alerts about rewards programs they have saved based on Google’s location services. Though Google announced some nine companies that have integrated the API, including, for example, Alaska Airlines and Marriott Rewards, the new service may not yet be quite ready. “We plan to launch these loyalty programs, offers, and more to consumers as soon as we can,” Google says in a blog post.
Despite the flurry of announcements, Google had nothing to say about Google Wallet at the point of sale, either with or without near-field communication (NFC), the contactless technology it embraced in 2011 when it launched the product and then began moving away from last year. Nor did the new APIs address the questions that have swirled around the product ever since a senior Wallet executive promised a completely new version of the product at a trade show in October. That overhaul has yet to appear, and the executive, Osama Bedier, has left Google.
Google stoked yet more speculation last week when news emerged that it had abandoned plans for a physical card it was reportedly working on to allow users to access Google Wallet at the point of sale.
But Google may yet have more Wallet news, as the I/O conference doesn't end until Friday. And observers say the news released on Wednesday could significantly advance Google’s overarching strategy, which is to use Wallet to gain more control over the flow of purchase data, especially in stores.
“In the aggregate, [the new services] show the direction they’re going in,” says Nick Holland, an analyst who follows mobile payments at Javelin Strategy & Research, Pleasanton, Calif. “None is particularly radical in its own right, but combined they show an incremental push of [Google’s] platform into being more retail oriented. That ultimately is what Google is about. The endgame is more information about the consumer.”
