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Posted by Brad Strothkamp on May 31, 2011
It has been 96 hours (give or take) since the Google's announcement that rocked the mobile payment space. During that time, I read literally dozens of news reports and blog posts to help me understand what this announcement really means. Incidentally, I found a great article that explains how this partnership will work.
Here is my take.
Banks and card companies should thank Google and Apple for providing an important cog in the mobile payments space. The embedded NFC chip is here, now let's move on.
Google further injected themselves in the payments ecosystem in order to generate revenue around targeted promotions, but frankly they are not needed there. The most customer friendly solution for mobile payments is one similar to mobile deposit where a vendor develops a mobile payments application that can be imbedded within an existing bank or credit card moblie application. If this is done correctly, it will not only drive utilization by eliminating the need to "set up" mobile payments by downloading a new app, linking accounts and entering card information, but also it decreases security concerns since it will be managed by a customer’s existing financial provider.
Additionally, there is a huge potential opportunity for banks and card companies to deliver on the role Google wants to play in the mobile payments by providing a venue to deliver targeted promotional offers. Banks and card companies don’t want (and frankly don’t need) Google to enable this as they already have vendors like Cardlytics, Billshrink, Segmint, and FMN Technologies delivering this role in a limited format already at banks like Regions Bank that could be expanded to cover similar functionality around mobile payments.
Agree, disagree? I would love to hear your thoughts.