Google Wallet: Some Preliminary Thoughts

It's very difficult to quickly and comprehensively analyze all the implications of Google Wallet. There are many.

I "live blogged" the press conference at Search Engine Land. For both consumers and merchants/retailers the proposition is pretty compelling: offer and loyalty card integration, single-tap payments and so on.

So far it appears that only the Nexus S phone will be capable of accessing and using Google Wallet, although there was some ambiguity around that issue. The merchants that are formally participating at launch the following: 

Screen shot 2011-05-26 at 10.34.04 AM

However any merchant that has the MasterCard "pay pass" system enabled can participate. Google has provided a merchant locator by zip.

Offers and loyalty will be a big part of this, which is where the marketing/advertising tie-in happens. The integration of Wallet with Offers and loyalty cards will be the big differentiator for retailers and marketers as well as consumers vs. other NFC payments systems. This is where Google has a big advantage over competitors including Apple, Amazon, PayPal and wireless carriers. 

Theoretically at least some of those competitors could participate in Wallet because Google says it's open ecosystem -- in the way that Android is: controlled by Google but anyone can participate. How will this affect other mobile payments initiatives, other payments startups and so on? 

That question is hard to answer at the moment. If there's fast adoption of Google's system (a la Android) many competitive efforts will be toast. But that very much remains to be seen. Because even consumers eager to participate in Google Wallet will need to buy the Nexus S right now. 

Once other NFC-enabled handsets become available, adoption should dramatically accelerate. 

See related: Square’s “Mobile Wallet” Service Sets Stage for Pay-By-Voice, Maybe