Description: Google (GOOG) is considering building a payment and advertising service that would let users buy milk and bread by tapping or waving their mobile phones against a register at checkout
Source: Businessweek.com
Date: Jan 4 , 2011
The service may make its debut this year, say the two, who requested anonymity because the plans haven’t been announced. It is based on near-field communication technology, which can beam and receive information wirelessly from 4 inches away.
Google joins a slew of companies that want in on the NFC market, which may account for a third of the $1.13 trillion in global mobile-payment transactions projected for 2014, according to IE Market Research Read rest of story
Questions for discussion:
- What is the revenuse model that Google would use to make a profit on this online payment business?
- What are the biggest obstacles to success of this venture when so many others have failed?
- Is the digital envioronment moving in a direction that will meke this venture a success? Why? or Why not?
Derek
I believe that some of the biggest obstacles to success for this venture will be security and the current view of these types of technologies. When you think of this kind of technology, you think back to RFID and how it has failed in this area. It is becoming very hard to win the trust of consumers, especially when things like this are happening: http://www.wreg.com/news/wreg-electronic-pickpocketing-story,0,5636726,full.story and are gaining popularity. Stories like this instill fear into consumers and they remember these stories when they are considering buying or even trying any new technology. I hope that this technology succeeds because it will make purchasing products that much faster, but these issues need to be dealt with. Google will have to come up with a way to ensure security when trying to create and market this technology in order to get wide spread use. I hope it is a better policy than that of RFID which seems to be nothing whatsoever.
Tiffany Smith
In the past we have seen that Google has been successful at giving customers new technologies that other have doubted. Google seems like a very cautious company (Gmail was just recently taken off “trial” status) who constantly are looking for ways to improve their products. Google also has a great reputation that will help in this venture. If Google did not take this opportunity it is almost certain that another company will. As cited in the article, Android technology is already coming close. The NFC market has already left a huge imprint on our economy. Perhaps we cannot see it as clearly in Canada, but in the US this technology is everywhere. Customers want convince, and when given it they demand even more. This new technology that Google is experimenting with would provide quickness as well as a very “futuristic” element to everyday shopping. I do not think that Google would have been successful in this endeavour even 3 or 4 years ago. Society had not warmed up much to such drastic technological advancements, and was especially wary when it came to banking technologies. Because of the lead up to Google’s idea of the last few years I think this is a technology that will not only be successful but will create huge demand and change the way the average person shops very quickly.
logan redman
I like the idea that I wouldn’t have to carry around so many annoying loyalty cards, debit cards, credit cards, cash, and what ever else is in the depths of my wallet. However, it already sucks to loose ones cell phone now. Loosing a phone will all your financial information on it too would be even worse. Not to mention the lag time in-between the lost phone and a new phone, how would you pay for things? It like having your wallet break and none of your cards work. Seems a bit odd.
Ifeoma Moseri
It’s an amazing idea but my biggest concern is security.It is so easy for people to clone cell IDs,credit cards and anything digital.This to me is letting Credit Card hackers have a field day as phones are visible and easily accessbile.Android has a LOT of security flaws.While they aren’t too big of a deal for average consumers;few corporations allow them on corporate networks and hardly support them.Wells Fargo has already started using the mobile phone as a device to process credit payments. You can read about that on CNN.Other countries already have the ability to use smart phones to process credit payments. With the increased chance for fraud, it will be quite a long and slow process to replace the current credit card offers with a pure electronic product. Google is continually looking for ways to expand their business and have a long list of failures that this will surely be added to without any fanfare.
The revenue model could be an extra fee to the retailer for the service (like credit card companies charge the retailer 2-3% per transaction)?Or I suppose the model is most likely that google has that much information on you to sell to targeted market research firms.No doubt mobile payment technology aside mobile ads will be the wave of the future.
Momah Moseri
This would be a good idea considering the fact that we won’t have to carry all sorts of cards in our wallet anymore because our account information and any other necessary information would be on our phone. It would be nice to walk into any store with just your phone, purchase anything with your phone or buy stuffs online and pay for it through your phone but what if you lose your phone or it gets stolen, what happens then? This will have to be the biggest obstacle in my opinion. Losing one’s phone will have a great impact on the person because it not like you just have only your messages and contacts in there but you also have your banking information and other vital information that could be used by another person. Google will have to try to provide a way of putting in password that will help people protect their phones or find a way of protecting the phones for them
whyte
For google to generate large amounts of revenue from this project they would have to run it like a credit card. Individuals would receive monthly bills and pay interest payments on outstanding balances, while retailers would have to pay a fee to have the service available at their stores. In theory it would eliminate the need to carry a card, and streamline the purchasing process. However, with the current technology I do not see this being widely accepted. Security is always the biggest issue when it comes an individuals personal financial information, and thieves are always coming up with new ways to steal peoples card numbers. Mobile phones often get lost, stolen or hacked, and would give thieves yet opportunity to access personal information. I would be hesitant to use the new system until it has proven to be more secure than phones have been in the past. The idea is there it just lacks the security.
Brittni Maurer
In order for them to make any revenue off this new idea they would have to have this business set up to get some sort of interest off of each purchase or something. The biggest obstacles to the success of this venture would be having the ability to get people to what to switch other to their new product. This would be a difficult task because many people today to have cell phone but how many of them have cell phones with the NFC option on them. Getting people to upgrade their phone would be a obstacle they thy will face, also that people might not be ready to move onto getting rid of all their credit cards, and having it all through their phone. It might scare people aware because of the thoughts of them people could hack onto their cell phone and have access to all of their bank accounts and information, at least with a credit card there in no way that anyone is going to get a hold of that number unless you lose you card.
I do believe that that digital environment is moving in the direction that this venture could be a success but I do believe that it is going to take many years before they will see any real results. As much of a great idea it is to have all off your payments done through your phone it is always far way from becoming reality. I do believe though that if they stick with this plan and slowly move it forward some day I do think it will be successful.
Rio P
Google is not the first company to initiate this type of transactional technology. In some countries in Asia, this technology has already been in place where users wave their cell phones to pay for small convenience store items as well as train passes. What occurs is that the charges go to your cell phone bill and you pay it off at the end of the month. If Google were to take a grab on this emerging market, they would need to find a way to use on cell phones other than their Android phones for their phones only represent a small market share while iPhone and BlackBerry dominate. The one obstacle that could stem from this new technology would be privacy and the security of the system. What occurs when you lose your phone or it has been stolen? Is it possible for others to use your phone and gain access to all of your financial information? I believe this would prevent a lot of customers from using this service, even though it is very convenient. Another potential problem I could see with this new system would be the dependency of the technology. How can Google guarantee that the technology will always work and that if by chance it isn’t working, what will the company do in order to remedy the problem?
If the system does take off, the type of revenue stream would either be by a certain percentage taken off of the sales, or it would be a percentage of sales taken from the cell phone bill.
This could be highly successful, but I think I would only use it if I knew it was going to be secure.
John
The digital environment is definitely moving this direction. Everybody over the age of 14 has a cell phone and we are continually looking for ways to eliminate extra things and integrate more technology and devices into one. This would be a huge step forward and the possibilities are truly endless. This could eliminate wallets all together. People could could have their drivers license, ID, bank accounts, and gift cards available at their finger tips without having to carry around a wallet. Not to mention the ability to keep track of your finances and receipts. Everything would be digital, this could also potentially reduce our environmental footprint by reducing the paper used for printing. Since this technology is already widely available in many smart phones and from the article the 3 cell phone giants (RIM, Apple, and Google) have all started developing patents and uses this product could be a huge success worldwide.