Google Wallet Thoughts

13 June 2011

Please see my disclaimer at top.. this is a biased blog.. (comment necessary because the PayPal folks don’t like me this week)

The rumors of my death have been greatly exaggerated…

–       Mark Twain

To restate from my tweet yesterday… Google Wallet Dead? Come on.. Just draw a simple chart 50 engineers working on a May 2011 go live.. and now 13 months later Google just stops working on it ?… just goes away? The Wallet team has only gotten bigger.. Do honestly think 50+ engineers are are all working support? Obviously something new is coming up..

What will the “new” wallet address? Well let’s look at the obvious issues:

  • Consumers don’t use the wallet after an initial “novelty phase”. I could have saved Google quite a bit of money on this one.. this is what my NFC pilots in 7 countries taught me at Citi. This problem is not unique to Google… it effects all NFC pilots.  Customers just don’t care whether they tap or swipe. This is the central problem that must be addressed.. there IS NO VALUE in the payment itself.. but rather the COMMERCE PROCESS. (see my previous posts)
  • Carrier control of the NFC element. This is just a mess, as is the entire supply chain (see 12 party fur ball). It is beyond repair. The carriers want to charge for each and every access of the secure element. That’s right, they want to charge credit card companies $1M a pop to get their cards in, and Hotel room providers for the right to enable phone as door key. This is a replay of their “walled garden” strategy they have tried many, many times (see Carriers as Dumb pipes).
  • Ubiquity (what goes in the wallet). Do Consumers really want to use a wallet that only accepts 3-4 specific issuer cards? Google wants customers to put whatever they want in the wallet, at no cost.. loyalty cards, debit cards, prepaid cards. Their “problem” is neutrality.. they appear to be a competitor to everyone (see related blog). Google wants to “enable” everyone.. if banks can create value… fine.. if merchants can create value.. fine. .but they are not taking sides. After all it is the consumer that chooses what works for them. For example, I don’t use Target’s iPhone app for price comparison inside a Target store…
  • Ubiquity (phone types). There is a limit on number of NFC enabled phones available for consumer use. You can’t create momentum by forcing people to upgrade phones.. that plays into Carrier control. The objective of any Wallet is not to force a phone upgrade, but to deliver consumer value.. to every consumer.. online and offline (my Blog on TXVIA). You must feel sorry for the carriers.. they would love to ship 2M+ SWP enabled phones.. but there is no supply chain cranking them out.. (yet I digress).
  • Ubiquity – Acceptance. The big retailers are not jumping over themselves in a rush to support tap and pay. Who pays for all of this new infrastructure? How can small merchants bypass stand alone terminals from Verifone and specialize cash registers (ex Square’s Register solution is superb)?
  • The most important element:  VALUE PROPOSITION. Take a look at Google’s merchant list for launch (, now take a look at ISIS ( Notice a difference? The big retailers are running away from the carrier/bank back mobile payments initiatives because #1 they don’t drive customer acquisition/sales  #2 have higher cost payment instruments (credit only). New value propositions must impact both.. See blog on Retailer’s Wallet plans

As I’ve stated before, pretend you are a retailer and draw a Venn Diagram. Put yourself in the middle. Now think about how you are going to influence customers before (or while) they shop with you. What % of customers does Verizon or ISIS currently influence? How about the banks? PayPal?  Draw a circle for each… base the size of the “influence circle” on number of times these companies influence with YOUR consumers every day. INFLUENCE.. NOT SERVE or INTERACT?

Folks, the challenge is NOT PAYMENTS.. but Value in COMMERCE.. Value requires supporting consumer and retailer interaction in 100s of ways.

I have no idea of what Google will release, or when they release it.. but I do have a great deal of confidence that it will be a major step forward in addressing the issues above.

8 thoughts on “Google Wallet Thoughts

  1. I first heard Tom saying “it’s all about VALUE PROPOSITION” almost a year ago and (strongly) disagreed at that time. It took me a few months to learn the hard way why that statement made perfect (common) sense. We then radically pivoted our product and never looked back, making incredible progress in the new direction (of VALUE PROPOSITION). THANK YOU VERY MUCH, Tom!

  2. Tom, I have no disagreement over what MNO’s ever did in driving customer traffic in to retailers. I believe they will overextend themselves on Isis to the point of being made irrelevant. They are already doing enough individually to drive customers further away, that a collective play is really not necessary. And further, I do understand “search” means “intent” and thats why Google has been hugely successful in monetizing our online browsing sessions. Yet, in offline it has no equivalent clout because consumers do not use Google to search for price comparisons. Our behaviors have not shifted yet from “directions to a place, finding the nearest store, connect & share” being the top most use-cases on a mobile phone. Today, for a retailer what appeals to them is more of a matter of ubiquity – in customer reach, before relevance. That is what they do today with FSI’s and mailed coupons and that is where they will start. They cannot yet take that leap of faith to a land where offers are carefully matched for relevance. They will still be trying to carpet bomb multi-channel, hoping to hit whatever that moves.

  3. Curious where you’d draw Amazon, which feels conspicuous by its absence in this diagram. Shouldn’t they be a major contender in the next gen of consumer-retailer interaction? Don’t they have the pole position when a consumer comparison shops while at the retailer?

    • I completely Agree. Unfortunately I have a few constraints from more fully replying. Amazon has much greater potential than PayPal. If only they would chose to focus.

  4. I bet you find it strange, Tom, that “Amazon and payments” subject was brought up at least twice during the past few day.

    I am still struggling to understand Amazon’s value proposition to (online) merchants. Sure, a large number of registered (presumed to be trusted/verified) customers who provided their card details and (home) address is not to be sniffed at. But is offering quazi-acquiring services – or is Amazon acting as a fully-blown acquirer? – in respect of that customer base the best way to monetize it? Especially if the rates are nothing to write home about.

    Amazon could consider the “wallet” route (how many more wallets are be introduced to the market before “wallet” becomes a four-letter word), but what tangible value would that bring to Amazon if they are not acting as an acquirer?

    However, if Amazon could offer to their customer base some unique practical features not available elsewhere (I am thinking along the lines of cloud, online security, geoshopping comparison, etc), that could be a compelling proposition. In any case, IMO, it makes more sense to focus on what one has (120+ loyal customers) than on what one may never get (loyal e-merchants using Amazon Payments).

  5. Pingback: Payments Part of OS: What does that mean? | FinVentures

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