Mobile payments are growing but it's going to take a long time before they're ubiquitous, according to Osama Bedier, Google's vice president of wallet and payments.
Speaking at the Global Mobile Internet Conference in San Jose, California, this weekend, he claimed that transactions made using Google Wallet, the search giant's entry into the NFC-powered payments market, had doubled in the first six weeks after August 1, but he refused to be drawn on actual numbers.
Google isn't the only company trying its hardest to promote the virtues of mobile, wireless payments. In the US alone it is joined by competing offerings from ISIS, Visa, Square, PayPal and Merchant Customer Exchange (MCX).
ISIS, formed by a partnership with Verizon Wireless, AT&T and T-Mobile USA, is launching the first trials of its own solution in Salt Lake City and Austin, Texas, on Monday, while MCX, a partnership of leading US brick and mortar retailers, announced at the start of the month a list of additional members including Bed, Bath and Beyond and Gap.
Using radio waves to transfer data between digital devices, NFC (near field communication) has the potential to turn smartphones into true virtual wallets. Rather than search for your credit or loyalty card, you simply tap your handset on the card reader at the checkout to pay for goods and services, use coupons and collect bonus points.
According to the latest Gartner report, worldwide mobile payment transactions are expected to surpass $171.5 billion this year and could be worth as much as $617 billion by 2016. "This will bring big opportunities for service and solution providers who will need to cater to the local demand patterns to customize their offerings," says Sandy Shen, author of the report.
However, what everyone, including Google, accepts is that it is going to take time for the idea to take hold and to grow with consumers and merchants alike. Google claims that it is currently shipping 1 million NFC-enabled devices a week, and for early adopters there are 83 different smartphones on the market around the world that support the technology. But a report by Frost and Sulivan estimates that it will take until 2015 for the technology to be available in over 50% of devices worldwide.
And even when half the world has access to the technology, it doesn't necessarily mean that 50% of the world will prefer using it to traditional payment methods such as credit and debit cards or good, old-fashioned money.