May 27, 2011
This week was huge for mobile payments with Google announcing its new mobile payments platform just yesterday, merely days after a big product launch for Square. Not a payments nerd like me? Here’s what you need to know:
Google Introduces Wallet- In its initial stages, Google Wallet will allow you to use your cell phone to pay for items at stores which have NFC technology in their terminals and POS Systems. You would walk into a shop, pick out an item, wave your phone in front of a device and you’re done. The money deducts from credit cards connected to Wallet and Google will offer you special deals based on your purchasing habits. Worried about security? Wallet will require a pin number to be entered when turning on a phone, and when accessing the application. When NFC chips are tampered with, they self-destruct and destroy all information.
Why it’s cool- Google has huge partners participating in every step of the chain. Major retailers such as Walgreens, Macy’s, and Subway have signed on to use the technology, and banks such as Citi and Bank of America are behind the project. With Android phones having the largest market share for smartphones, Google’s ubiquity could make Wallet mainstream…quickly.
Square Launches Card Case- Payments innovator Square launched two new products this week: Register, which allows merchants to use an iPad as a POS system, and Card Case, a consumer app that lets users create tabs to pay merchants using their smartphones. Using Card Case, users would create a “tab” at participating merchants, eliminating the need to swipe their credit card. Merchants have the advantage of a POS system with analytics and advanced features right on their iPad.
Why it’s cool- POS systems can be clunky and expensive. Square allows merchants to get quickly set up accepting credit cards for a fraction of the usual cost. This is great news for small businesses. Card case also has cool features like the ability to view menus and daily specials, emailed receipts, and location based directories.
The bottom line:
Square and Google’s new products aren’t really competing, at least for now. Square will help small, local businesses while Google’s reach is more mainstream. Both companies’ new products rely on rapid mass consumer adoption in order to become relevant. With this criteria, Google is poised to make a bigger splash because of its ubiquity. However, Square has the nimble footed ability to move quickly, at a startup’s pace. Watch out for more exciting announcements in the coming months from both companies regarding mobile payments, and be sure to keep an eye out for other innovators such as PayPal or Apple who may make gamechanging announcements as well.
Guest writer Stella Fayman talks to business owners each day about their payment needs by working at startup FeeFighters.com—a website which lets business owners quickly and easily compare credit card processors. She is passionate about startups and entrepreneurship which she promotes through Ignite Chicago and the Future Founders program.
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