Google Wallet: What's Not Going to Be in Yours
Google (GOOG) officially made its new system for paying bills with a smartphone, Google Wallet, available today. Only, available is a relative term. It means you own a Google Nexus S, your carrier is Sprint Nextel (S), and you have a Citibank-issued MasterCard.
Sure, that's the beginning and Google has bigger plans. Only, they're not going to go anywhere. The things that Google does really well aren't what will make a consumer-oriented venture like this take off. What Google does badly is exactly what it needs most. And the companies that can most influence what happens have different plans in mind.
Wrong skill set, Larry
As my BNET colleague Jim Edwards noted, there are strong reasons why Google wants into mobile payments. However, wanting and getting are different. This is a case where desire won't end up being enough.
Google excels at one thing in business: giving away software and services and making money off advertising. That explains the search engine, Android, Google Apps, YouTube, and anything else that gives it an excuse to either show an ad or get more information about consumers.
Those skills have helped its mobile operating system, Android, do tremendously well in the smartphone market. However, to get there, Google had to go the sort-of open software route, giving hardware vendors and the carriers they need to please the ability to change a fair amount in the product while still keeping as much control as possible.
In practice, Google tries to convince vendors that they should do things its way to get early access to new software releases. But given the company's intended purchase of handset vendor Motorola Mobility (MMI) and the upcoming Senatorial grilling over antitrust, Google has to tread more carefully to avoid appearing like it's trying to own the mobile market.
Go along to get along, or get told to keep moving?
Even without the antitrust concerns, Google has traditionally lacked one major characteristic that is key to pulling off using a phone as a charge card: the ability to play well with others. Yes, it's formed deals, only too often by becoming the defendant in an intellectual property lawsuit. Hollywood studios froze it out over Google TV, because they fear how the company treats copyright. Publishers and writers are still suing over Google Books and the alleged unauthorized use of copyrighted material.
Google succeeded in mobile, but only because the hardware vendors were an intermediary and had strong partnerships with the carriers. And that's the problem. The carriers can force the handset vendors to move in given directions because of the volume of products they buy.
The carriers all want a piece of the payment pie. You could say that getting a snip of transactions is in their raison d'être DNA. Google has a deal with Sprint.
Sure, Google has upcoming deals with Visa, American Express, and Discover, but you can bet those aren't exclusive:
- Visa has its own mobile payment plan.
- MasterCard didn't develop its payment system to limit itself to Google.
- American Express has its system.
Maybe Google will get better at this, but I don't see the big networks giving the company a chance to control the payment system. And then there's the whole issue of consumer data and how Google uses information that falls into its hands.
Related:
- Google's Senate Hammer-Fest (and Why It Won't Matter)
- Why Google -- Channeling George Costanza -- Is Suddenly Interested in Banking
- Google Wants One Android Ring To Rule Them All
Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.
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