Thursday, May 26, 2011

near-field communication

The Web search engine giant took the wraps off of Google Wallet and Google Offers, which will launch in the season. The platform is powered by a technology called near-field communication, now found on some wallets and select phones, which is compatible with newer point-of-sale terminals. G is the latest company to attempt to make its mark in mobile payments, a potentially lucrative area that has drawn not only traditional banks and credit card companies, but new entrants such as the wireless carriers and handset manufacturers. Mobile payment is attractive because it is seen increasing the rate of purchases by consumers. But the bigger opportunity lies in delivering targeted coupons and advertisements through the technology.

"Google's interest is in the data that underlies the complete chain of commerce including consideration, promotion, transaction details, coupons, and receipts," said Charles Golvin, an analyst for Forrester Research. The lure of mobile payments has for years caused a shift in alliances and disputes over how to roll out a broadly implemented system. Google, for instance, has partnered with MasterCard Inc.

Google is teaming with Sprint Nextel Corp. (S) as its carrier partner and is using the Nexus S, made by Samsung Electronic Co. Ltd. (SSNHY, 005930.SE), which is equipped with an NFC chip. Sprint sells the Nexus S 4G, which it calls one of its best-selling phones. Verifone Systems Inc. (PAY) is making the checkout terminals, while VIVOtech Inc. is supplying the NFC readers. Google also listed 15 retail partners, including American Eagle Outfitters (AEO), Macy's (M) and Walgreens (WAG).

Google Wallet will begin in New York and San Francisco, and will expand nationally in the coming months. Google Offers, which is a daily discount sent to the phone, will begin in Portland, Ore., New York and San Francisco. The discounts are designed to be redeemed using the phone to pay. MasterCard said there are 100,000 merchants ready to accept NFC payments.

"We have enormous opportunity in front of us to redefine commerce and payments," said Stephanie Tilenius, vice president of commerce for Google.

Tilenius emphasized that the announcement represents the start of a larger roll-out of mobile payments.

"It's important to realize we're just getting started," she said during a press conference on Thursday. "This will take a while to come to fruition."

Users can place multiple credit cards on the phone, and eventually add gift cards. They can also turn the card off to avoid accidentally making a payment. Tilenius touted the system as more secure. "It's a wallet you can lock," she said.
The platform also allows consumers to create a card on the fly, and will eventually offer the ability to send digital copies of receipts back to the phone. Google is also considering game dynamics, and will allow consumers to tap posters with NFC chips to get coupons. It's all part of what Google calls a "mobile, local" strategy. The vision is to have the phone ultimately store all the info.

Google isn't the only one to dabble in mobile payments. On Wednesday, Bank of America Corp. (BAC), Wells Fargo & Co. (WFC) and J.P. Morgan Chase & Co. (JPM) launched a service the lets people use their checking accounts to send each other money with an email address or cellphone number. Bank of America is also undergoing a trial with Research in Motion Ltd.'s (RIMM) BlackBerrys and MasterCard.

"This is truly transforming the shopping experience,"


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