Mastercard Mobile Payment
Google is accelerating its march to join the mobile payment business by partnering with Citibank, Mastercard, Spring and several retailers including Macy’s, American Eagle and Subway. The company is expected to announce “mobile wallet” services tomorrow on the Google Nexus S, allowing users to make payments on Mastercard PayPass terminals using near-field-communication (NFC) technology. Many retailers are expected to bundle the service with customer rewards programs.
The Google Nexus S is the only current phone that can use NFC in Google’s lineup thus far. Five cities will launch the service this summer in New York, Los Angeles, Chicago, San Francisco and Washington, D.C.
Apple will feel a sting of jealousy on this one, as Bloomberg reported earlier this year that the company has been investing to integrate NFC technology into the iPhone and iPad. Company records indicate that Apple applied for a patent on NFC technologies for Apple apps to communicate with each other but the company seems to be lagging behind, as no solid plan has been announced.
However, Apple’s rumors about the iPhone 5 have included whispers of NFC, and if the company makes an announcement about NFC at its June deadline for the annual iPhone update, it could send Google reeling. If Apple were to announce NFC on the upcoming iPhone 5 and let developers of mobile payments work on it before the launch, it would be a serious coup, as Google is only able to rely on its Nexus S for NFC, which is dim in popularity compared to the iPhone.
While Google’s growth is accelerating at a fast pitch, Apple’s large group of iPhone users and dominance of the tablet market with the iPad may create enough critical mass to become the standard in mobile payments.
However, other mobile payment systems such as startup Square, which recently processed $3 million in mobile payments, is banking that NFC won’t become popular. Twitter co-founder Jack Dorsey is part of Square, which requires retailers to plug a card-swiper into the headphone jack of a mobile device to make a sale. Square is partnered with Visa to launch a new product called Square Card Case to operate like Google’s “mobile wallet” offering. Square’s services work on both the iOS and Android platforms.
It will be interesting to see who ultimately wins with even more stakeholders such as eBay and its PayPal subsidiary investing billions in mobile payments as well. It’s definitely a race, with Google looking strong at the gates, but I wouldn’t be surprised if Apple blows us away with a bombshell this summer.
