buy metformin online

Google Building an NFC Mobile Wallet; U.S. Banks are Interested

Jan 6 2011 (All day)

Google is building a mobile wallet nicknamed "Cream," which it plans to integrate with Android NFC phones that consumers could tap to pay in stores, sources told NFC Times. Among banks showing strong interest is U.S.-based Citigroup.

At least one other major U.S. bank has expressed interest in Google’s NFC mobile-payment initiative, JPMorgan Chase, said a source, who added that MasterCard Worldwide and Visa Inc. have also been in talks with Google about possible participation in the Web giant’s plans to launch the wallet and enable a mobile-payment and advertising service on NFC smartphones. Among those phones is expected to be Google’s own Nexus S, said sources.

If the parties go ahead with the plans, an announcement of a launch could come early this year, with some sources predicting it could happen in a matter of weeks. Several Android-based NFC handsets are expected on the market this year, but at present there is only one, the Nexus S, launched last month, which still doesn’t support payment.

'Cream' of the NFC Phone Crop?
But contrary to reports Tuesday, most sources agree that Google is not planning its own mobile-payment service. Instead, it would likely act as an enabler for mobile payment by banks and other payment service providers as part of a strategy to capture mobile advertising revenue for itself. In particular, Google would target consumers when they are in the store or right at the point of sale terminal.

Google makes the vast majority of its revenue now from advertising on the fixed Internet, but as more and more Web browsing and searches move from desktops and laptops to smartphones, Google needs to adapt its business model. With mobile phones, the company could locate consumers using global positioning or NFC’s tag-reading capability and charge advertisers, such as merchants and consumer products companies, for access to shoppers.

"Google is not interested in becoming the next MasterCard; they’re interested in enhancing the payment device with pinpoint accuracy for advertising and marketing," said a source with knowledge of the initiative. "It’s the holy grail of every marketing company–to impact the consumer in the place where they can buy."

The Cream wallet would be a default feature on Android phones, just like Google Maps. And just as Maps uses GPS to help render its services, Cream, or whatever the wallet app would be called, would have NFC technology as an enabler, said a source.

At present, the Nexus S and the latest version of the Android operating system running on it, called Gingerbread, only supports tag reading. As part of its Hotpot service, Google has launched a pilot enabling consumers with the Nexus S to tap NFC-tags displayed by merchants in their store windows in Portland, Oregon. With the service, users could pull down information about the merchants, including reviews and recommendations, and Google could gain information about the users, said Nick Holland, senior analyst with U.S.-based technology research and consulting firm Yankee Group.

"While the mass media is lit up about Google becoming the next Visa or MasterCard, they are totally missing the point," Holland told NFC Times. "Google makes 97% of its revenues from advertising and will continue to look for ways to do this. There is a huge dormant opportunity for them with physical world merchants. Tapping an NFC-enabled phone at a physical merchant location is equivalent to clicking an advertising link to get to a Web page–it is evidence that a potential consumer has been there and, for Google, monetizeable. Why would Google want to squabble over interchange fees and transaction share when they can own location-based advertising instead?"

Citi and MasterCard perhaps see the Google m-wallet initiative as a way to gird for expected competition next year with the Isis joint venture made up of three of the top four mobile carriers in the United States, Verizon, AT&T and T-Mobile USA. The telcos plan to introduce their own payment brand at the point of sale, using the Discover Financial Services retail network. They also are keen to use NFC phones sporting the popular Android platform–in this case, to load with their Isis application.

This might create a battle for control of the primary secure element in the phones, where the payment applications would be stored. Many of these secure elements are expected to be embedded chips, as in the Nexus S, not on SIM cards, which are strictly under the control of cellular operators that issue them. But since mobile operators in the U.S. exercise much control over distribution of phones to subscribers, they might also demand control of the master keys from handset makers to any embedded secure chip in the phones.

One source also said Chase and Visa have expressed interest in working together on a prepaid payment application for the Google wallet. Google had also tried to recruit Bank of America, which was initially receptive, but then dropped out, said the source.

Citi and MasterCard could not be reached for comment. A spokeswoman at Chase said the bank would not comment "on this speculation." Visa declined all comment when reached.

"If this is true, it will make an enormous splash in the market," said Todd Ablowitz, president of the U.S.-based payments consulting company Double Diamond Group, speaking of a possible launch of mobile payment by Citi and MasterCard involving Google, given the Web giant's powerful consumer relationship.

Going Beyond Stickers and microSDs
Citi and MasterCard are working together on a passive-sticker program, launched last spring, which to date is Citi’s only actual mobile-payment offer at the point of sale. But the bank has indicated that much more is to come with NFC and contactless-mobile payment. Chase and Bank of America have been testing contactless microSD cards with Visa. All three banks have participated in NFC phone trials.

Visa may not be so keen to be part of the Google wallet, said a source, but its banking customers are clamoring for products they can use to enter the mobile-payment market and ward off feared competition at the physical point of sale from such payment services providers as PayPal and the Isis joint venture. Visa’s only answer so far to these threats have been some shopping apps and its contactless microSD card program, which some say is not yet ready for the market.

"Visa is trying hard to remain in the race," said a source.

Even with the banks and card networks involved, launching NFC payment will still be a challenge. At present, fewer than 2% of merchant point-of-sale terminals in the United States support payment from contactless cards or NFC phones.

Some observers believe Google might want to introduce payment, but mobile advertising still would be at the core of the company's strategy for making money with NFC phones. One option would be for Google to bypass the problem of the scarcity of readers at the point of sale by using low-cost tags. Consumers could tap their NFC phones on the tags at the point of sale and conduct cloud-based payment transactions. Instead of an actual payment application stored on a secure element in the phone, perhaps a credential of some type would be secured there, authenticating the user to the network.

"The next wave of eyeballs at devices will be with mobile smartphones," said Charles Walton, chief operating officer for NFC chip supplier Inside Secure, who sees the cloud-based payment option as viable. "Based upon their current business model, I might theorize that their (Google's) next step could be mobile NFC commerce services that are a giveaway to gain continued and growing dominance in their core-revenue segment of advertising. This would turn the industry upside down."

Article comments

 
AlexanderViken Jan 12 2011

But would you trust a device running Android to handle your financial data? As long as Google doesn't enforce some sort of control, or build control into the OS, Android will have a hard time to gain the needed trust it needs i think.

http://agilemobility.net/2011/01/android-virus-alert-androidos_geinimi-a/

Dan Balaban's picture
Dan Balaban Jan 12 2011

It's likely Google or other parties involved in the wallet, such as banks, would use the secure element to store credentials, encryption keys, etc. In the Nexus S, that secure element is an embedded smart card chip.

Please register or login to post a comment.

HEADLINE NEWS

Contactless Reader and NFC Vendor OTI Reports Higher Sales

Israel-based On Track Innovations reported new orders for its NFC and contactless readers in North America, along with the first shipments of its NFC-enabled Wave attachment, driving higher revenue, though the vendor’s quarterly losses continued.

Identiv Reports Higher Revenue; NFC a Key Driver

U.S.-based Identiv reported higher revenue and narrowed losses for the second quarter, predicting a breakeven or positive result by the end of the year, as the company’s restructuring program draws to a close.

Inside Sees First-Half Revenue Fall, but Says Strategic Shift on Track

Aug 5 2014 (All day)

France-based Inside Secure reported a 9% drop in revenue in the first half, which it blamed on the end of shipments of NFC chips to BlackBerry and lower sales of “legacy” EMV chips to Europe.

Westpac NZ Product Chief: HCE Offers Bank More Simplicity, Control

Aug 1 2014

NFC Times Exclusive: Westpac New Zealand’s product chief told NFC Times he believes host-card emulation will reduce costs and increase flexibility, while ensuring the bank can use its own branded wallet.

With HCE Threat Looming, Telcos and Their Trade Group Seek to Cut Cost and Complexity of SIM-Based NFC

NFC Times Exclusive: With interest in host-card emulation continuing to grow and SIM-based NFC rollouts in need of a boost, mobile operators and their global trade association, GSMA, are pushing for significant cuts in the cost and complexity of TSMs and lowering other hurdles that have discouraged service providers from provisioning their applications on SIM cards.

Broadcom Discusses Connectivity Chip Wins but Makes No Mention of NFC Following Q2 Results

U.S.-based Broadcom did not mention NFC in its recent conference call with analysts following release of its second quarter results, in which it announced cuts to its global workforce of 20% by exiting the baseband mobile processor business.

People on the Move: Group of Visa Vets Form Start-Up, Tapping NFC and BLE Technologies

A group of former top managers in Visa’s mobile program have formed a start-up that plans to use NFC and BLE to deliver coupons, rewards and other offers to consumers in stores, using the branded apps of retailers or other marketers.

Visa Offers New Details of Planned Tokenization Service

Visa Inc. has released a few more details of its planned tokenization service, which it announced last week as part of its Visa Digital Solutions “suite of offerings.”

Transport for London to Accept Bank Cards, NFC Phones on Underground, Other Transit Modes

Transport for London today announced it would launch acceptance for open-loop bank cards and other contactless payment on its heavily traveled London Underground and other modes of transit in September, while the UK’s largest mobile operator, EE, announced customers could begin to tap their NFC phones to pay fares at the same time.

Visa Announces Plans to Introduce Token Service as Part of Mobile Revamp

Jul 25 2014 (All day)

Visa Inc. announced Thursday it would launch a tokenization service in September, as part of what it calls its Visa Digital Solutions “suite of offerings.”

NXP Reports Higher NFC Sales, Offers No Hints on NFC-Enabled iPhone

Jul 30 2014 (All day)

NXP Semiconductors said sales in its emerging ID business–mainly made up of its NFC chips–increased by 22% in the second quarter, compared with the first quarter, and CEO Richard Clemmer insisted the chip maker’s secure element business would continue to remain a strong contributor.

Westpac New Zealand Launches HCE Trial, Snubbing Country's Planned TSM Platform

Westpac New Zealand has announced a small trial of host-card emulation-based payments, with plans to introduce the technology to customers early next year.