Saturday, June 9, 2012

Slow Traction for Google Wallet Isn't Surprising

The possibility that Sprint is launching its own mobile wallet platform, and might, as part of that effort, have to displace Google Wallet on its devices, will add yet one more provider to a chaotic mobile wallet environment. Neither Google Wallet nor Isis, for example, have gotten significant traction yet, nor, in truth, should have that been expected. 


Both Isis and Google Wallet require creation of a huge new infrastructure of near field communications point of sale terminals and end user devices, plus new end user behaviors and a clear value proposition. Those would be difficult under the best of circumstances. 


Google will do what it always does: keep working on the next version. It is far too early to declare any long-term winners in the NFC mobile wallet business. Consumer adoption of important new technologies can take some time. 


Products such as tablets can reach significant penetration rather quickly because the rest of the infrastructure, including widespread Wi-Fi, apps, end user behavior, business models, quality broadband (at least for purposes of supporting video apps, a key tablet app) and even familiarity with the touch interface are established. 


Near field communications has almost none of the infrastructure requirements well established. For that reason, many of us would caution that patience is needed. It might take as much as a decade before there is significant penetration. 


ATM card adoption provides one example, where "decades" is a reasonable way of describing adoption of some new technologies, even those that arguably are quite useful. 


“Mobile proximity payments will remain in infancy for at least five years,” said Jim Van Dyke, Javelin Research president. In other words, payment systems based on near field communications, and others, might take that long to begin getting serious traction.

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