Google Inc. will not officially acknowledged it and AT&T Inc. declines to comment, but mobile-device, search-engine and payments observers on Feb. 3 were abuzz over a report that AT&T subscribers with Android-powered Galaxy Nexus smartphones equipped with Near Field Communication chips and an AT&T SIM card now may download the Google Wallet.

If the report is true, many more phones would be able to use Google Wallet. The owner of the blog Droid Life reported on Feb. 2 that, although Google Wallet has not officially been available through carriers other than Sprint Nextel, he discovered that Google Wallet was available for download from Android Market on his AT&T Galaxy Nexus with an AT&T SIM card. It had previously not been available to AT&T subscribers with that phone and card.

The Google Wallet application that enables users to store payment card information and pay with a tap of the phone launched on Sprint Nextel Nexus S smartphones in September. Google Wallet users also may redeem coupons with a tap at participating retailers American Eagle Outfitters, The Container Store, Foot Locker, Guess, Jamba Juice, Macy’s, OfficeMax and Toys “R” Us.

Emily J. Edmonds, an AT&T spokesperson, declined to comment on the reports that AT&T subscribers can download Google Wallet on their Android-powered Galaxy Nexus smartphones with an AT&T SIM card.

The news is the latest in the maneuvering among Google, telecommunication carriers, card companies, retailers as well as Isis, the rival wallet application developed by AT&T, T-Mobile USA and Verizon (see story).

But for all the hubbub over carriers and phones that will support either Google Wallet or Isis, neither product will thrive without a broader point-of-sale acceptance infrastructure, observers say.

The development of NFC-equipped phones continues to outpace installation of POS systems that can do more than complete a contactless payment, Rick Oglesby, senior analyst for Aite Group, tells PaymentsSource (see story).

“There’s going to be a lot of investment in (NFC-equipped mobile devices) in 2012,” says Oglesby. “I’ve heard that from a variety of the telcos.”

Oglesby says the next steps include consumer trial and acceptance, and installation of POS systems that can maximize wallet power.

“I don’t question that we’re going to be able to see phones with NFC technology in them, and I don’t question their ability to put wallet software onto those phones,” Oglesby says. “This is a step in the right direction. We need to do these things to even find out if consumers will adopt.”

One of the barriers between Google and the wireless carriers is that Google Wallet is not a typical application in which consumers simply download it and use it. Special hardware is needed on a phone that downloads Google Wallet, Oglesby says.

Verizon cited this late last year when announcing that it would not preload Google Wallet in its Galaxy Nexus phones before shipping them (see story).

Google financed the hardware in the Sprint launch, but it does not want to do so for another carrier if the carrier also wants compensation for making Google Wallet available, Oglesby says.

When and whether the wallets and required technology become commonplace on phones, only half the battle will be fought. Wallet use will remain spotty until merchants install the POS systems that can maximize not only transactions but the loyalty, coupon and marketing power the wallets promise, Ogelsby says.

“There’s certain players that can do it in scale; an NCR could do it in scale within their merchant segments, (as could) VeriFone with a very large market share in the POS devices and the ability to scale out,” he says. “There’s no one provider that can throw the switch and turn it on across the board.”

What do you think about this? Send us your feedback. Click Here.

 

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry