Google
(CBS/What's Trending) - The wave of smartphone payment systems has officially begun. Yesterday, Google debuted its new near-field communication-based mobile payment platform Google Wallet, which enables customers to make purchases at check-out counters with the wave of their smartphones.
"Our goal is to bring together all the pieces of the ecosystem. Your phone will be your wallet. Just tap, pay, and save," Google VP of commerce Stephanie Tilenius said at the Google Wallet unveiling. "We believe 2011 and beyond will be the age of MoLo--Mobile Local commerce."
The search engine's latest innovation comes as no surprise, considering the rise in mobile phone payments. According to a MasterCard survey, from Kelton Research, 62 percent of Americans on mobile devices are open to making purchases using their phones.
While the benefits of connecting the online space with the physical world are blatant,
there are some limitations with the new service. The Google Wallet app is currently only downloadable on the Nexus S phone, and is only functional with Citi MasterCards.
Coincidentally, the Google Wallet news comes hot on the heels of a major announcement made by the startup Square, which makes mobile credit card payments possible with a device that attaches to a smartphone's headset/microphone jack. On Monday, Square released a Register app for businesses to use an iPad when purchases are made. Consumers using Square's mobile app can be completely free of plastic.
One advantage Google Wallet has over Square is the vastness of its already existing network. Because Google Wallet is piggybacking on relationships with the MasterCard PayPass system, the new service already has a large number of locations where it can be used.
It may be too early to tell which product will prevail in the smartphone transactions space. When the platforms mature, which one do you see yourself using, Google Wallet or Square?
