Google Wallet Isn’t About Payment, But Mobile CRM


ADOTAS – In late May, Google announced its digital wallet — an Android application that lets people with Android phones equipped with near-field communication (NFC) technology pay for goods by simply tapping their handset on a special payment terminal. Field tests are underway in New York and San Francisco.

Initially, the app only works with a prepaid Citbank MasterCard at merchants that have the MasterCard PayPass terminals (it’s a fairly big list), though eventually Google promises it will turn into the kind of open platform the company loves so much, working with any card or payment network.

Sounds a lot like what we keep hearing from Isis, the joint venture between AT&T, T-Mobile and Verizon to launch NFC payments in the U.S. But here’s the difference: at the end of the day, I don’t think this initiative is going to have anything to do with payment. We already have a lot of payment methods, and Google has already brought in MasterCard to handle that part.

If Not Payment, Then What?

Rather, Google Wallet will be about creating an ecosystem to enable location-based marketing in the form of promotions, vouchers and coupons. You can bet the wallet will be integrated with social networking in some way (surely the Google+, first and foremost). When you walk into a Macy’s or past a Starbucks, those retailers will be able deliver offers straight to your phone: 10% off socks! Buy one Trenta, get the second free!

In other words, it’s mobile CRM. Google is about personalization, about profiling customers and delivering targeted ads. That’s why this is such an interesting play. Google Wallet is big because we’re looking at a whole different level of advertising, a new breed of player starting to enter the mobile spectrum.

Cooperating Operators

I mentioned above that the payment part of Google Wallet — tapping your NFC phone to an NFC terminal at the point of sale — sounds a lot like what we’ve been hearing about from Isis.

As anyone in this industry will testify, it’s hard to get the operators to work together. They are seriously competitive with each other, and we’re seeing that play out now, as the way the big three have been presenting Isis has continued to change since the initial announcement.

The reality is that every one of those operators has its own, independent payments initiative as well. In the end, I don’t believe that Isis will result in anything more than a proof-of-concept.

What we eventually need—in every country—is to bring the banks, operators and retailers together to create a mobile payments ecosystem. Now, if anyone can do that in the U.S., it’s Google. They have the dollars and the market reach.

Added Value

At Sybase, our position has always been that with mobile payments in developed markets, there needs to be more value than just the payment mechanism — we already have credit cards, direct debit, etc., and those methods work well.

To change consumer behavior, there has to be a compelling reason. You have to get something more.

A great example of that is the paybox system in Austria. It provides added value with services that go above and beyond. When you use paybox to pay for parking, for example, you get an SMS 10 minutes before your meter expires so you can top it up again if you like. A paybox-enabled vending machine uses the phone to identify the buyer’s age as well as to extract payment.

Google Wallet doesn’t deliver added value now, but I believe it will—and soon. Their web site promises that eventually the wallet will hold “loyalty cards, gift cards, receipts, boarding passes, tickets, even your keys.” (We’ll have to wait and see about the keys.)


  1. Google is transforming the mobile payment space- and Google will be a true disruptor in this space, if not already. Google and other companies stand to benefit not just by providing digital wallets, but by going in for a mix of wallets and personalization. Companies need to profile customers and provide targeted information on their mobiles based on spending habits, demographics, purchase preferences, etc., For the success of digital wallets, companies need to look at providing ‘personalized pockets’, and not just any digital wallet.

  2. In future, a truly differentiated Mobile Solution in financial services space, and that which would gain largest market share will be the one that is not just about Mobile Payments, but more importantly about Mobile CRM – a solution that can leverage insights gained from the customer data to provide personalized and localized promotions, coupons and vouchers.

    Another key aspect of Mobile CRM solution is from the financial organization’s sales and service force perspective. Robust Mobile CRM solutions are needed for enabling use of handheld devices to manage sales, sales contacts, and customer service activities. For this, organizations must consider clearly defining their targeted consumer and corporate users, understand business drivers that can be satisfied by the Mobile CRM solution; and analyze information needs of the sales / service forces. They must also analyze the alignment of the proposed Mobile CRM technology platforms with organization’s enterprise architecture strategy and look into security aspects. Refer (The Need for a Truly Mobile CRM Solution) for an article from Infosys Limited on the need for a Truly Mobile CRM solution for financial organization’s sales / service force and the challenges faced in implementing such a solution.

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