Google Wallet: Smaller, Impulse Buys are Likely Sweet Spot

Google Wallet has launched with a rather impressive set of partners spanning the key retail, finance and mobile ecosystems, each of which is necessary.

The leveraging of the MasterCard "PayPass" network is important, as it brings potential access to more than 124,000 merchants in United States.

But the partnerships with Verifone, Hypercom and perhaps others will put Google Wallet in next-generation point of sale terminals over time. But it is the immediate installed base of terminals that is most important right now.

Starbucks signed up so many users for its mobile payment system in part because it was able to use the entire installed base of POS terminals, did not have to create or recreate a payment system or deal too much with the number of smart phones able to use the network.

One would not be surprised if the "killer" transactions turn out to be relatively small purchases, many of an impulse nature. Walgreens and Subway provide examples. People will probably spend a relatively small amount per transaction, but might conduct transactions relatively frequently.

Google Wallet: Handicapping why it will (and won't) work | ZDNet