A recent update to Google Wallet lets users not only pay with a single tap of their mobile phones but also redeem coupons and earn loyalty rewards. This could help drive loyalty program enrollment as well retailers’ promotional activity.

The Google Wallet app launched last month for Nexus S 4G phone from Sprint and has been signing up new retailers offering Google Wallet integration at the point-of-sale. Starting this week, users at select stores can now not only pay via Google Wallet but also redeem coupons and/or earn rewards points.

“For retailers, this means that in both cases, for rewards and coupons, they can now make it possible for people to pay and get rewards with a single tap of a phone,” said Nathan Tyler, a spokesperson for Google. “They can make those rewards and offers available to people inside the phone itself.

“It is just a start, it can be very targeted in terms of the type of coupons or Google Offers that you send to folks,” he said.

“It is very nice to collect to rewards in one tap as opposed to pulling out a card and scanning it at the register. “

Seamless redemption
Google, Moutain View, CA, first introduced Google Wallet in May. It is the result of a partnership between Google, Citi, MasterCard, Sprint and First Data. 

Google Wallet uses the NFC chip embedded in some mobile phones to enable payments when users tap a contactless point-of-sale terminal in stores.

The app is one of the growing number of mobile payments options vying for the wallets of consumers and attention from retailers.

Google announced the Google Wallet enhancements on its company blog.

Users see a new “Featured Offers” section in the Offers tab that includes exclusive discounts, such as15 percent off at American Eagle Outfitters, 10 percent off at The Container Store, 15 percent off at Macy’s and a $2 smoothie at Jamba Juice.

Users can save the offers in Google Wallet and they are automatically applied to the bill when they check out.

The ease of the process works to the retailers’ benefit as well. 

“This will be a sea change in the ease of offer redemption and awarding of points,” said Matt Wise, CEO of ePrize, Pleasant Ridge, MI.

“We expect a substantial increase in in-store digital promotions,” he said.

“The reduction of friction in the loyalty process will radically increase participation in such programs and provide vastly enhanced insights for the marketer to leverage for future programs and consumer rewards.” 

Mr. Wise is not affiliated with Google and spoke based on his expertise on mobile payments.

“Promotions historically have been weighed down with operational logistics such as paper coupons, clearing houses, external registration requirements,” Mr. Wise said. “Now there can be instantaneous selection, redemption and awarding due to the instant authentication of both product purchased and consumer eligibility.

“Offer redemption will no longer require a paper coupon nor a separate code entry at the point of sales, but will now be seamless,” he said.

The simplicity of using a mobile phone to earn loyalty rewards with a single tap could also encourage more consumers to enroll in the programs, per Mr. Wise.

The retailers providing loyalty cards for Google Wallet include Foot Locker, Guess, OfficeMax and American Eagle Outfitters. This will enable users to automatically earn rewards points when they make purchases using Google Wallet.

Google promoted Google Wallet at participating retail locations in San Francisco and New York City  last week to demonstrate how it works. For the promotion, marketing teams used phones with Google Wallet to pay for small items for shoppers.

Participating retailers included Peet’s Coffee, The Container Store, American Eagle Outfitters and Jamba Juice.

The promotion also included a Coca-Cola vending machine at Union Square in San Francisco.

Google continues to expand Google Wallet and reports that retailers such as Chevron, D’Agostino, Faber News Now, Gristedes Supermarkets and Pinkberry are working to equip their stores to accept Google Wallet.

The new capabilities could improve the payment experience for shoppers and are a positive step forward for mobile payments.

“This creates a new paradigm in which the payment experience can now be a positive branding experience,” Mr. Wise said.

“The mobile payment space is still in its infancy, but this will increase the value of the Google Wallet experience,” he said.

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York