Google Inc (NASDAQ:GOOGL) seeks to keep pace with Apple Inc. (NASDAQ:AAPL) by attempting to revive its “Wallet” service before the mobile payments department gets dominated by Apple Pay. If history is any indication, then Apple’s entry into the market does not bode well for already established players such as PayPal, as Apple is known to enter an industry and completely change the dynamics of how it operates.
With the growing number of people switching to smartphones, especially in the emerging Indian and Chinese markets, it is only right to expect that mobile payment systems will become the mainstay in the coming future. Samsung (OTCMKTS:SSNLF) has also acquired LoopPay to not get left behind in this growing market. According to a Wall Street Journal report, Google (with its deep pockets) is spearheading a group of like-minded device makers, banks, wireless carriers, and payment networks to develop and launch a new refined version of its Google Wallet payment service. Google has even reportedly found the backing of partners by offering more revenue share in return for their cooperation. It is said that the tech giant plans to introduce this new version of its service during its developer conference in late May.
Apple has managed to keep an aura of exclusivity for its iOS software by keeping it within its product portfolio, and it has full control over its flagship iPhone smartphone applications; the same cannot be said for Google. Google has licensed its Android platform to many companies, which allows smartphone makers and wireless operators (offering many different Android devices), with a variety of preloaded apps. This can be problematic if changes made by one smartphone maker is not compatible with another, and so ultimately the whole payment service is in in danger of being brought into disarray.
Samsung’s plan to go its own way with LoopPay Inc. can put Google’s operations in direct competition with its largest Android-licensed player, which sells the largest number of Android-based phones. The introduction of LoopPay by Samsung has made many wonder if Google Wallet will find a large audience for its service.
Apple CEO Tim Cook last week said that Apple’s launch of Apple Pay was possible only because of the company's control over its systems and the fact that it operates its products within its ecosystem providing seamless integration.
Analysts see Google’s strategy as one that combats consumers being lured towards iPhones instead of Android phones to benefit from payment services. Apple, already glowing from its record-breaking iPhone shipments of 74.4 million during the last quarter, would certainly not mind more sales of its products. There is also news that the new Apple wearable, the Apple Watch, will also allow Apple Pay services. Tim Cook remarked last month that Apple Pay accounted for $2 of every $3 transactions made using contact-less payments.
Google initially launched its Wallet payment service back in 2011, allowing users to make purchases via NFC (Near Field Communication) counters. The problem, however, was that a large number of big US carriers did not opt to pre-load the Wallet app on their Android phones.
Google now realizes that it has to act fast if it wants a slice of the online payment pie and is in talks with banks and payment networks such as MasterCard Inc. and Visa Inc. to ease the transaction module.
It waits to be seen which of the three payment system – Google Wallet, Samsung’s LoopPay or Apple’s Apple Pay – wins with the most consumers.