With Google debuting its new NFC-equipped digital wallet last week, Bank Innovation sought out a player who has followed the mobile payment movement for years to gain some perspectives on what the launch means for the industry. That person, Randy Vanderhoof, executive director of the Smart Card Alliance, tells us that the news points to the pent-up desire for mobile payments in the US, and how the new technology is finally becoming a reality to consumers.
“It’s great news to see so many leading companies working together to create mobile payments e-commerce,” Vanderhoof tells Bank Innovation. “The team Google has assembled for this is a dream team of leaders of each aspect of the market that needs to come together for such a thing.”
More importantly, the digital wallet announcement, which partners Google with MasterCard Inc., Citigroup Inc., First Data Corp. and Sprint Nextel, also underscores the progress in mobile payments taking off as a whole.
“We knew Google would be an important player,” Vanderhoof says. “It’s somewhat of a surprise [Google] was able to align themselves with the banking industry. …It really indicates a lot of interest and pent-up demand.”
Indeed, the amount of pieces in solving the mobile-payments-come-to-life puzzle are many, and include partnering of disparate players (i.e. banks, merchants, carriers, and more) and rolling out infrastructure that allows consumers to use their phones to make a payment. Much of that work has been going on behind the public scenes for the last few years, and as evidenced with the recent Google announcement, some of the fruits of the labor are becoming obvious.
“Now we are seeing some result of this effort,” Vanderhoof tells Bank Innovation. “Very visible players are now ready to test the waters and put product in the hands of the consumers to see how it works.”
Still, beyond introducing digital wallet technology to the market, the industry still needs to offer consumers reasons why they should embrace the technology. “Consumers are looking for value propositions: What can they do with the Google wallet that they couldn’t do before?” Vanderhoof asks, pointing to how contactless payments have existed for some time, but failed to ignite mainstream enthusiasm.
Yet, the fact that innovation is igniting through the mobile phone will help drive some of that engagement organically. Indeed, he says mobile payments have more inherent cache as they have a “techy following” that “anxiously looks” for new capabilities to hit the market. Translation: there’s a smartphone-equipped population already starving for greater mobile payments functionality.