“Are you ready to pay for everything via your smartphone?”
That was the open-ended question asked in the lede of a USA Today article on May 27, 2011 following Google’s launch of its 
pride and joy – Google Wallet, a wireless payment technology (based on near-field communications or NFC) that would eliminate the need for leather-bound wallets forever.
As we approach the one-year anniversary of Google Wallet’s public unveiling, it’s become clear that the technology hasn’t exactly done away with cluttered physical wallets. The reality is that there are more than 610 million credit cards held by US consumers, and “paper or plastic” is still the most likely question asked during checkout.
Google’s should still get credit for continuing to have such strong vision though. Besides, it’s not every day that a company’s name becomes an official verb in the Oxford English Dictionary and reaches that status a scant eight years into its existence.
So why am I encouraged by this technology’s potential?
Loyalty opportunities are unmatched and technology stands to be the primary driver of those changes. Which is why the hardware – and potential – behind NFC is so enticing.
Similar to Bluetooth™, NFC relies on radio frequency identification, but operates at far shorter ranges, generally around 4/5 of an inch to 4 inches versus a few hundred feet. Instead of swiping traditional credit or loyalty cards, NFC allows for virtual cards on smartphone screens that can be scanned by point of sale readers, much like the common credit card swipe does today. Considering that nearly half of US adults (46%) own a smartphone and already are performing and expect to perform a host of tasks through that medium, from booking travel arrangements to mobile checkout of hotels, to mCommerce, it’ll only be a matter of time before the public welcome’s NFC’s embrace.
Google is looking to predict longer-term consumer interest, even if all the technology is ready today. Nearly a year since their announcement and only the Nexus S 4G on Sprint (and an imported GSM Galaxy Nexus) are capable of using the GW app. Despite the company’s efforts to expand its business horizons, Google remains typecast as the world’s most popular search engine and map imaging pioneer.
Today there’s growing excitement and even expectation that Apple – the vanguard of mobile – is about to throw itself into the NFC mobile payments mix and is rumored to be developing iPay for the next generation iPhone. Presumably, iPay will do very much what Google Wallet already does. By being marketed, launched and packaged by Apple, and reaching a far greater audience, iPay could be the payments success Google is looking to achieve.
Whether it’s Google Wallet, iPay, or something entirely different, as a loyalty marketer, NFC offers unmatched opportunities in that arena too. And it’s another reason why I’m convinced mobile payments are on the verge of catching on. By remaining within the mobile medium, marketers can offer a mobile-enabled loyalty promotion without making customers jump through real-world and virtual hoops to redeem them. And with market research firm Frost and Sullivan predicting that by 2015, NFC transactions will be a $151.7 billion industry, you can bet Apple is working as hard as it can to ensure that it learns from Google’s efforts to penetrate the market.
Thanks to loyalty programs that could use some rethinking, a plethora of credit cards and an extreme abundance of iPhone and Android apps, smartphone users are all but crying out for simplicity. In the end, effective loyalty is not about rewarding customers for what they’re doing already, it’s about rewarding them for what they’re not doing and what the sponsoring brand wants them to do differently.
Taking that mantra to its literal conclusion, here are my expectations for the future. NFC mobile payments are the way of the very near future and Apple might well be the company that successfully delivers it. When (and if) iPay is realized, organizations should consider how their products & services can be optimize with mCommerce technologies. Consumers will continue to embrace the newest smartphones, gain more comfort with contactless payments and begin leaving their leather wallets at home for ease and simplicity. The cool factor of the mCommerce product, increased loyalty to the sponsoring brand and piece-of-mind rewards for changing their behaviors will be priceless.
