Google wants to help shoppers leave their wallets -– which are often bursting with a deck of credit cards --at home.
In its New York City offices this week, the world's most popular search engine offered a demonstration of Google Wallet, a mobile app that aims to transform your phone into your wallet. Such an app, which the company is currently field testing, could help expedite the sea change bubbling in how people shop and pay for goods. The company plans to release the app soon.
What makes Google Wallet a debut to watch for is that the company has partnered with some major credit card providers and retailers to support its launch.Here's how it works: The app stores users' credit card, retail loyalty card and gift card information in the phone. It then allows users in a retail store to pay at the register by waving their phone in front of a near-field communication (NFC) reader.
"The launch reflects Google's efforts to simplify and redefine the shopping process for both consumers and businesses," the company said, in a blog post. "Because Google Wallet is a mobile app, it will do more than a regular wallet ever could.
"It's aimed at making it easier for you to pay for and save on the goods you want, while giving merchants more ways to offer coupons and loyalty programs to customers, as well as bridging the gap between online and offline commerce," the blog says.
Users will also be able to redeem retail offers and earn store loyalty credit with a single tap of their mobile phone. Retailers ranging from Macy's and American Eagle Outfitters to The Container Store and Subway have already signed up as SingleTap merchants.
When the app debuts, Google Wallet will support payments with two payment options: a PayPass eligible Citi MasterCard and a virtual Google Prepaid card. By partnering with MasterCard, Google has made it possible for users to pay at checkout stations with their Google Wallet app at any retailer that accepts MasterCard PayPass.
It's not just the consolidation of payment methods into a single electronic wallet that makes Google Wallet interesting, though: "It has the potential for the transformation of the checkout experience at retail," Noah Elkin, principal analyst with eMarketer, a research-and-trend analysis firm on digital marketing and media, told WalletPop.
And it seems that Google Wallet's time has come, as consumers continue to increasingly use their cell phones to make payments. Research firm Yankee Group predicts that the worldwide transaction value of mobile payments will total $984 billion by 2014, up from $162 billion in 2010.
But before we sound the death knell for credit cards, consider this: "We've had credit cards for so many years now, but we still haven't eliminated cash," Elkin says. "There will be a long time before this is available everywhere."
Indeed, says Elkin, "Many retailers are taking a wait-and-see approach to how the space shakes out before they put their brand behind it."
Google Wallet: A Shopping Game Changer?