Recently we’ve been hearing grumblings about how Verizon is blocking the Google Wallet on the upcoming Galaxy Nexus. One of the arguments is that Isis has a legal lock on any wallet that goes on an Isis carrier.
But let’s think about this for a second. Isis has no wallet right now; Google does. Why not let Google do the heavy lifting now, so that Isis can benefit later? Just because you have a mobile wallet means nothing.
Let's say there was no Google wallet. Isis would be basically alone. It would have to incur, with its partners the expense of promoting and educating the public. It would also have to gather and sell the merchants. Google can do this now, and save Isis time and expense in doing so.
So what does Isis have to fear? It might think, "Oh no, if we let Google in, it will lock up the market on the mobile wallet!" Sorry, folks, but it's software. And the phones change every year and a half. So the likelihood that any software player will have a lock is basically impossible.
What about gathering merchants? Would Google have an early edge on locking in merchants? Nope, wrong again. In payments, it’s the same Mastercard Paypass that Isis would be using, so getting Google to push for merchants means more locations all ready to use Isis when they do finally have a wallet.
But what about the value-add like coupons and loyalty that Isis plans to potentially profit from? With VeriFone/Hypercom becoming the de facto "standardizer," we’re likely to see them define the standards that both Google and Isis can use. The merchants will pick the best of the bunch and not get locked in for 20 years. Technology is moving faster and faster, and with that speed no one will be locking in anything for the near, or long, term future.
If Verizon simply allows Google Wallet on its network, it gets an edge over any other carrier in the U.S. today. That means a reduction in churn. Verizon also gets Google as a promoting partner to lock in consumers, get them to want mobile payments, get retailers secure on mobile payments, and, therefore, create the perfect situation – at near zero expense. It could have three to five times as many merchants next year accepting mobile payments than it would be if it blocks the Google Wallet.
Blocking the Google Wallet on the upcoming Galaxy Nexus would be Isis and Verizon shooting themselves in the foot. Let Google have its day. There are multiple wallets to come, all to be carried on a single phone. Google’s ambitions are global, something Isis can never dream of. So there is an advantage to both parties at this point in the early launch days of the mobile wallet.
Right now, Isis and Verizon need to see the Google Wallet as the geeky rich best friend from the movies, the one the mean girls takes advantage of. When Google Wallet gets everything built, they cut the rich girl off and take advantage of it. It doesn’t sound very nice, but we’re talking about a mobile carrier and a mobile wallet. Who ever thought this would be nice?
If Isis wants to slow down or screw up mobile payments, it blocks Google. But if it wants to create opportunities for itself, my suggestion is let the Google Wallet in. Let Google push. Let Google promote. Let Google sell. Then Isis can come in to the party with a bigger, better environment.
Verizon loses nothing today, but gains everything tomorrow.
Einar Rosenberg is a recognized expert in mobile payments who has written multiple papers and spoken internationally on the topics of NFC, RFID, location-based services and Bluetooth. Mr. Rosenberg is currently the CTO of Narian Technologies.