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Will Google Wallet’s growth be stalled by carriers?

December 7, 2011

Google Wallet will not be available on Verizon's Samsung Galaxy Nexus phones

Google Wallet will be not available on Samsung Galaxy Nexus phones from Verizon, a development that impacts the service’s growth going forward if other carriers also find reasons to not offer Google Wallet.

Several recent reports said that Verizon is blocking Google Wallet on Nexus phones available from the carrier, something the carrier denies. However, the fact remains that the mobile payments app is not available on phones from Verizon.

“Recent reports that Verizon is blocking Google Wallet on our devices are false – Verizon does not block applications,” said Jeffrey Nelson, a spokesman for Verizon Wireless, Basking Ridge, NJ. “Google Wallet is different from other widely-available m-commerce services.

“Google Wallet does not simply access the operating system and basic hardware of our phones like thousands of other applications,” he said. “Instead, in order to work as architected by Google, Google Wallet needs to be integrated into a new, secure and proprietary hardware element in our phones.

“We are continuing our commercial discussions with Google on this issue.”

Stumbling blocks
The Google Wallet app officially launched in September for Samsung Nexus S 4G phones and is currently available at retailers such as Gap and Toys R Us.

However, the phones are currently only available from Sprint, limiting the number of consumers who have access to the app.

Google has confirmed that it is not running its mobile payments apps in Samsung Galaxy Nexus phones from Verizon at Verizon’s request.

“It’s clear that the carriers are trying to protect potential future revenue streams by examining competitive options and current innovations closely just in case it is something they want to pursue in the future,” said Bjorn Hildahl, vice president of product management at Kony, Orlando, FL.

“They have a stake in making sure they protect their customers and their revenue streams,” he said. “With any mobile payments solution, part of the appeal is universal acceptance and adoption.

“We’ve seen that be the stumbling block for many mobile payment opportunities, including now with Google Wallet. Everyone wants a part of the opportunity, which ends up constricting some of these mobile payment solutions before they can get off the ground.”

Verizon customers owning a Samsung Galaxy Nexus phone could get mobile payment capabilities when the Isis solution launches next year.

Isis is joint venture of Verizon, AT&T and T-Mobile.

While consumer adoption is important for the growth of a mobile payments solution, it is just as important that retailers buy in as well.

“At the end of the day, the current infrastructure of mobile payments doesn’t provide widespread adoption for any of the available options,” Mr. Hildahl said.

“As a merchant, the question you’ll be faced with is: do I want to pick a solution that may eliminate 50 percent of my customer base?,” he said.  

“We’ve seen everything from NFC, to Google Wallet, to a barcode/PIN payment, and none of these payment options are being mass produced into phones or experiencing widespread adoption.”

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

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