Google Pay stands on shaky shoulders, and that's a good thing

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CHICAGO — Did it take Google seven years to perfect its mobile wallet, or did Google Wallet's tough launch guide today's Google Pay?

Google can’t underestimate the importance of its maiden voyage with Google Wallet and the lessons the company learned in being one of the first to offer payments through cellphones in the U.S., said Jack Connors, manager of merchant global partnerships at Google.

In the past year, Google has rebranded Android Pay as Google Pay, expanded into other markets, became a payment option through the Safari and Chrome browsers, and gained some adoption as a mobile pay method for transit cards and storing tickets and boarding passes.
“The different evolutions of Google’s payments ventures are well documented, but I would venture to say that we wouldn’t be where we are today" without Google Wallet, Connors said at the annual Mobile Payments Conference. “Any time you are trying to do something new, it is difficult, but this is a multisided market.”

To make Google Wallet work, it needed to get the technology to work on smartphones and at point of sale terminals, obtain bank support, negotiate access to the secure element of a handset to store credentials, and educate merchants on acceptance and consumers on its operation.

That was a handful in 2011. Initially, a consumer could use Google Wallet only with a Citi card on a Sprint mobile phone. Getting traction was difficult at best and near-impossible at worst.

“And the secure element meant the hardware manufacturer had to participate, but if we hadn’t gone through that, we wouldn’t have moved to host card emulation, which got rid of a lot of the hardware dependencies,” Connors said.

The payments industry wouldn’t have moved as quickly to tokenization of mobile payments without seeing what Google was dealing with during its initial wallet experiment, Connors added. “You have to start somewhere, and it’s the iterations, I think, that have made Google Pay what it is today.”

Google also didn't hesitate in establishing Near Field Communication as its connection between the consumer device and the POS. It was a technology that the short-lived Softcard and, eventually, Apple Pay would also adopt, reinforcing what Google had in play at its starting gate.

All mobile wallet providers have taken a similar path “to reach their unique value adds,” Connors acknowledged, but it was especially vital for Google as a pioneer in the field to learn about what it would take to keep mobile payments on an upward trajectory.

Google Pay is a significantly different look than what the search-engine company deployed about 15 years ago to get e-commerce merchants engaged with customers and receiving online payments.

“We have always viewed ourselves as an enabler for merchants,” Connors said. “If you wanted to sell something, you could advertise on Google.com, and the consumer would go to the merchant website and, hopefully, fill out a web form with their name, address and credit card credentials.”

It resulted in the novel approach of ordering online and receiving a shipment later, but over time consumers wanted an even easier way to shop through their phones.

“That is the context for Google Pay today,” Connors said. “The world wants a unified seamless experience for checkout.”

In essence, Google realized the “distance between the expression of some demand, or the search, and the transaction, had to collapse,” Connors added. “Google Pay is a way to give retailers who want to compete to do their best equivalent of a one-click checkout.”

A “big flip” Google made with Google Pay was to structure it as an app that would allow payments everywhere through a user’s Google account, Connors said.

Google rebranded Android Pay as Google Pay in February 2018 about two years after reintroducing the Google Wallet concept as Android Pay.

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