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Google acquires TxVia to improve Google Wallet user experience

April 6, 2012

Google Wallet has acquired prepaid card platform provider TxVia

Google’s acquisition of payments technology firm TxVia could translate to a better user experience for Google Wallet.

As a provider of prepaid card platforms, TxVia has significant experience with processing payments in real-time. Such know-how could help Google improve the mobile payments experience by insuring that purchases made via Google Wallet at the point-of-sale are processed quickly and accurately.

“What they want to do is make sure that Google Wallet works right at the point of sale,” said Mark Beccue, senior analyst at ABI Research, New York. “Someone who is processing prepaid cards is processing real-time information, which is helpful for allowing mobile transactions.

“It is not about them gaining market share,” he said. “It is allowing them to improve their product and gain knowledge about how the back-end processing works.”

“They still want to work with Visa and all those guys – they just want to make it work better.”

Faster payments
TxVia offers a fast, flexible and reliable payments platform. Since 2008, it has supported the management of more than 100 million accounts.

TxVia also certifies and directly connects to the major payment networks. As a result, Google Wallet will be able to take advantage of TxVia’s relationships with the payment networks to scale up its solution globally.

However, most of TxVia’s client appear to be local governments and healthcare companies, possibly limiting Google’s interest in leveraging the company’s relationships.

“Do they want these consumers, these merchants, whoever is issuing the prepaid cards?,” Mr. Beccue said. “It does not seem to be that way.

“I do not believe the deal is for merchant relationships,” he said.

One of the core skills that Google, ISIS and others in the mobile payments space need to get right is the basics of a payment.

Consumers typically do not have issues with getting an old-fashioned magnetic stripe credit card to work. This means that if they try to pay at the point-of-sale via a mobile phone and the payment does not go through for some reason, consumers might revert back to using credit cards.

Mr. Beccue reports that he has used Google Wallet to pay for purchases on multiple occasions and in two instances the payment did not go through. In one instance, he was out $40.

Other mobile payments solutions are having similar issues, per Mr. Beccue.

“If I cannot make a payment, and if I lose money, that is not good,” Mr. Beccue said. “Will TxVia help eliminate some of these problems – maybe.”

Table stakes
Google’s mobile wallet was introduced last year and makes it possible for mobile users to redeem discounts, earn loyalty points and pay via an app on their mobile devices.

There have been rumblings that Google Wallet is facing difficulties gaining traction. The rumors have been backed up by a series of recent departures from and reassignments at Google Wallet, including Jonathan Wall, one of the creators of the Google Wallet software, who left to start his own company focused on mobile shopping and Marc Freed-Finnegan, lead product manager for Google Wallet who went with him.

However, any predictions of problems may be premature as Google is known for quickly coming to market with new technology and tweaking as it goes along. The company continues to add new retailers to Google Wallet, including frozen yogurt chain Pinkberry, which came onboard last month (see story).

Additionally, Google Wallet is expected to become available on more Android devices from Sprint sometime this year.

“Nobody is out there doing this processing in real-time right now,” Mr. Beccue said. “There are not a lot of NFC players in the United States where this is happening.

“[The deal for TxVia] should allow Google to do this better – and that is kind of table stakes,” he said.

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