Yesterday Google announced its debut of “wave and pay” technology that will let consumers carrying Nexus S 4G phones (a Sprint network device) use their phone as a credit card substitute for payments on the fly.
A near field communication chip inside the phone will store payment information. Merchants including Walgreen’s, Subway and Macy’s have already signed up for the system.
Payments may be linked by the phone owner to a Citi MasterCard. Users will also be able to fund their Google Wallet balance with any other credit card.
Although this is still early days, David Eads, a mobile payments expert with Kony Solutions, stressed that now is the time for forward-thinking credit unions to contact Google to learn the details of getting involved in Google Wallet. “It will be important for credit unions to be part of this mobile payments revolution.”
Eads pointed to announcements from Research In Motion (the BlackBerry maker) and Nokia that their phones going forward will feature NFC mobile payment chips. Google has made similar comments about market leading Android cell phones. That establishes the backdrop for what looms to be a significant change in how we pay that probably will unfold over the next two to three years.
A plus of the Google approach–which is debuting in New York, San Francisco and a handful more markets–is that for now Google is building out the NFC network for free. (Google’s revenue will come via location-based offers, suggested Eads.)
“That this is free should resonate with credit unions,” said Eads. “Credit unions need to coordinate with Google to make sure their cards work as part of Google Wallet.”
Eads stressed that “it is too early to declare NFC the winner.” Probably there will be alternatives to the Google system coming out of Apple, PayPal and Visa. “The mobile payment future looks very cluttered,” he said.
“Trillions of dollars are at stake,” Eads added. “That is why credit unions need to stay involved in this.”