Google Wallet further empowers the smart phone

See Figure One for a schematic explanation of Google Wallet functionality. The next phase of the Google Wallet is expected to enable users to store driver’s license, admission tickets, other IDs as well as electronic access (keys) in application file, in other words to resemble a physical wallet. (See Figure One - Schematic Operation of Google Wallet.)

MoLo

The success of the Google Wallet is largely dependent on the increasing popularity of mobile and local (MoLo) platform programming. As a mobile application the Google Wallet has the capability to handle transaction settlement, apply discounts, apply promotional campaigns, and factor loyalty points in the final reconciliation. MoLo Rewards (molorewards.com) technology allows users to earn, find, and use coupons for a variety of purchases. With MoLo e-coupons, which likely can work with any e-wallet application, are located and applied at the point of purchase with affiliated rewards being appropriately managed. Basically, a consumer taps a mobile Google Wallet device on an NFC payment reader, exchanging payment information, applying relevant discounts, and aggregating loyalty rewards.

MoLo is built on both NFC and RFID technologies. An NFC-compliant device is also equipped with an RFID tag that creates a unique identification code to control transactions. The code links to data stored on MoLo Rewards servers. (See Figure Two - Schematic Operation of MoLo Rewards.)

Google Offers

By broadcasting price discounts and product promotions directly to the phone of the consumer, savings can be applied when the products are purchased and settled at the point-of-sale (POS). Sales credits are applied to the transaction at time of settlement, loyalty or reward points are posted, and a receipt is sent back to the phone as support documentation. There are no hard copy documents that accompany product purchases. The Google Wallet is bundled with Google Offers software to produce a comprehensive and efficient shopping device. (See Figure Three - Google Wallet with Google Offers Content Example.)

Projections

Unlike credit/debit card processors that rely on transaction fees for revenue, Google does not plan to profit from transaction processing fees, but instead will aggregate purchase data for transactional and trend analysis. Google views the Google Wallet not as a means for transactional residuals, but rather as a way to expand its mobile advertising strategy. Concentrating on consumer data is expected to generate a competitive advantage for Google over alternate electronic payment schemes since transaction expenses will be lower and NFC readers may be provided to retailers at little or no cost (supplemented by Google).

According to projections by financial analyst group Canaccord Genuity, Google revenues could exceed $14 billion from mobile-advertising sales in 2015. This projection is based on the increased volume of mobile search, display, and applied advertisements on smartphones with Google Wallet operating under the Android operating system. Google's growth is expected to increase significantly between 2011 and 2015 given the abundant growth of mobile, social and local applications on handheld devices. The main factor leading to significantly enhanced mobile revenues is the projected success of Google Wallet and Google Offers.

Note: If currently using a smartphone for Google Maps, then a similar sequence of activities is followed for Google Wallet and the use of advertising and promotions. For example, consider what happens when employing the mapping application in search of a local pizzeria. The application will display nearby pizza restaurants along with available promotions. Following service at the selected pizza place, the smartphone housing the Google Wallet is waved to initiate payment while active discount are redeemed and applied against the amount due.

Summary

The Google Wallet is simply a way to pay for goods via a mobile phone (m-commerce) and was recently launched through a partnership with Citibank, MasterCard, Sprint, First Data and three major retailers (Macy’s, Subway, and Walgreens). The Google Wallet is a downloadable application for a smartphone equipped with Near Field Communication (NFC) technology. This technology enables consumers to complete a purchase transaction by waving or tapping the phone with an NFC-compliant payment terminal. Part of the download includes the flash sale, coupon-based Google Offers. Google Offers is a flash sale service based on local promotions, discounts, and special offers. Google has been described as disinterested in charging transaction fees as it plans to derive revenue from location-based advertising, couponing, and related promotions.