Alistair Newton, a research vice president at Gartner Research who researches mobile payment systems, points out that there is little customer and retailer demand for mobile payment systems, and there have been few success stories so far. Many have tried to implement NFC swipe-as-you-go payments in the past, he notes, particularly in Asia and Europe, with little success.
“This Google application is really going to be a supplementary payment utility for those consumers who chose to use it,” he says. He also suspects that many people won’t want to try it because “people are inherently quite conservative about money.”
Another obstacle will be convincing retailers to buy new point-of-sale terminals to read the NFC phones. While some retailers have already signed on to accept Google Wallet, it may not be enough. “For this thing to really scale and be accepted everywhere, every merchant is going to need a new point-of-sale system that can read NFC, and that’s a really big commitment,” says Maurer.
But he believe Google may succeed where others have failed if NFC becomes widespread on smart phones, and if the company can encourage developers to create apps that use the technology—an app that lets restaurant customers split a bill, for example.
Newton believes Google Offers could also be vital to the strategy. “The one area where we see the mobile payments working is where you see a convergence between mobile payments and loyalty and coupon [programs],” he says.
“I think there’s a strong and robust future for mobile payments, but it isn’t going to happen overnight, and it isn’t going to be for everyone,” he adds.