What is Google advertising?

What will be the impact of Google Wallet, and how will it synergize with Google Offers, Google Advertising platform and Google Maps?

• This week Google will announce the first phase of their mobile payment platform.  There will be very unique connections to Google Offers, the Google Ad platform and Google Maps. It is clear that some of the technology is based on Near Field Communications (NFC). What will the impact be to retail merchants and consumers?

• Answer:

  Short answer:  Too soon to tell, but there is much more to this then just Payment Card Acceptance. http://www.GoogleWallet.com The most important points to consider before anything is: Google Advertising Platform And Goggle Offers- Google has direct access to the largest base of retail merchants in the world with their ad platform.  The also hold the largest number of Offers and Discounts in the world. Google Maps- Google maps is visited about 450 million times per month, the most visited mapping application in the world. Gmail- There is estimated to be 205 million active Gmail users. I am somewhat limited in speaking to deep details at this point.  But there is a great deal that can be covered. This is speculation and parts I mention may not be adopted at launch. The Google Near Field Communications Test, A Success? Google has been testing NFC retail Card Payments for a number of months with Citi Group/Mastercard/Verifone ().  I have visited a number of the Google Retail test locations and was surprised to see quite a bit of use.  In some cases regular customers have already developed clear habits using the service.  Currently no mobile device is required, as a very inexpensive sticker is given out to customers to attach to anything the desire.  These come in sheets and rolls and are handed out to just about every customer I observed during my visit.  Clearly the entire process is platform independent at this point.  Citi Group has spent an incredible amount of time with these merchants and helped adoption by targeting select Citi Group Payment Card users to be part of the tests.   MaterCard and Verifone have supplied 100s of NFC readers that can connect to any Standard Credit Card terminal.  This means that there is absolutely no change required in the Payment Card Processing relationship for any merchant that wants to adopt this system at this point.  This represents a zero barrier for adoption to a merchant if the $65 NFC reader is subsidized by Google/Verifone/MasterCard.  There are offers currently for 1000s of subsidized NFC readers that will connect to existing Payment Card Terminals. Vivotech may also play a very big part of this program with the NFC readers. There is a registration barrier for the NFC sticker for the consumer.  It is a few steps to link any Payment Card to the NFC sticker.  However, clearly Google will offer the Google Payment Wallet as a way to encourage a far richer consumer experience. MasterCard will also test an iPhone based system this year in the US using iCarte (http://www.icarte.ca/) as a temporary measure until Apple release the expected NFC devices. Project "Cream", The Google Wallet, The Consumer Google also has been testing project "Cream", a Wallet application since late December 2010.  Project "Cream" has been directly endorsed by about a dozen Banking partners thus far. This will be the basis of the new app Google will release shortly.  The Google Wallet will use the NXP PN65 chip.  This chip will secure the contents of the wallet in Triple DES encryption security standards.  This system will lock the wallet from a hardware level. The Google Wallet will of course have a number of expected options for consumers, (Payment Cards, Reward Cards, etc)  but there will be a number of non obvious enhancements that Google hopes will drive wide adoption.   At this point I can say that Google will leverage Gmail and Google maps and Google Offers a driving point for the consumer.  Google Offers has a staggeringly large database of offers and it is just really starting up.  One can see the pieces fall into place as Google leverges Google Offers, Google Maps and Gmail as a way to drive consumers to the Google Wallet. Google has also partnered with Foursquare on a number of levels, with the obvious NFC check ins.  There will be much more to this relationship in the future. Project "Cream", The Google Wallet, The Merchant No one needs to be told just how large Google's Advertising platform is.  Google knows a great deal about millions of retail merchant at this point.  They also know quite a bit about the 100s of millions oc consumers that use it's services every day. There is a huge opportunity to leverage this data in a retail setting. One of the primary reasons Google wanted to purchase Groupon was for it's huge, amazing, professional, feet on the street direct sales force. It is a huge and motivated group of professional sales people that know how to meet with merchants and motivate them to see benefits to a marketing program. Google wisely knows there is an absolute limit to the number of merchants they can reach though it's own advertising platform and viral methods.  They of course are in the process of creating their own direct sales force.  This critical point is always overlooked by just about all companies that dream of contacting retail merchants. It is important to understand, in contrast to other Wallet systems.  Google is not trying to own the infrastructure in the Payments Space, they are just facilitating and incentiveizing infrastructure.   The premise Google has is that they will reach more merchants far quicker if there is no major need to change any relationship. Clearly Google will create a zero barrier to merchant adoption as nothing would need to be changed on the merchant side for minimum participation, at this point.  More advanced participation will required an Android device or a computer.  First Data, who controls 75% of all US retail transactions will be implementing the infrastructure.   This will make it impossibly easy for most merchants from a technology perspective. Google will bring it's huge number of users of Gmail, Google Maps and Google Offers to the merchant by actively driving traffic to the retail stores.   One can not discount the powerful "firehouse effect" this may have on retail business.  By precisely targeting offers to consumers businesses can use Google to find new customers and to reward existing customers.  Cost to merchant: $0 Conclusions It is very early days at this point but Google will announce a significant number of early retailers.  Macys and the Container Store will be some of the first national retailers to showcase this service.  There is no doubt that Google will have a decidedly large impact on the retail Payments space.  There is no doubt they will face a great deal of competitors both new and existing.   I do not think anyone underestimates the successful impact Google can create in it's "Perfect Storm" scenario of Google Ads, Google Offers, Google Maps, Gmail, NFC, Andriod and all of the banking and technology partners.