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Banks, credit card networks and technology companies like Google could be wasting money on developing mobile wallets and other smartphone payment systems. A Lightspeed Research survey found that the ability to make mobile payments is "very unimportant" to about half of credit card customers with smartphones.
September 21 -
Bling Nation, the mobile payments and loyalty company, has shut down its service in a move it insists is only temporary. Based in Palo Alto, Calif., and known for its colorful cellphone payment stickers, Bling says its service interruption is part of a bid to stay competitive by rolling out a revamped product later this year.
June 7 -
Is Google Inc.'s online payment system, Checkout, getting ready to check out?
March 16 -
In the two months since unveiling its Checkout payment service, Google Inc. has worked hard to attract large merchants, but it has said little about its long-term strategy.
August 24
Like a pop star who sells more records posthumously, the Google Checkout payment service may prove most beneficial to Google after it is phased out.
Google's mobile wallet is about to absorb the user base of Checkout, the search giant's underwhelming answer to PayPal. Both the online and mobile payment services will be called Google Wallet.
By folding Checkout — which is used by 9% of consumers, according to Javelin Strategy and Research — into Google Wallet, Google could catapult the latter well ahead of many competitors in mobile payments.
The biggest challenge any mobile wallet provider faces is the chicken-and-egg issue of getting consumers on board. Most systems are designed around how to best serve the companies that would profit from them: the banks, payment providers, hardware makers, telecoms and others.
The consumers are key, but recent studies show
Checkout has had a troubled history. Its biggest selling point upon its 2006 launch was pricing: it waived payment fees for companies that also advertised through Google's Adwords service.
But Google kept Checkout alive and even worked to improve the service in the years that followed. Even as Google shut down support for other prominent services, such as its social networking systems Wave and Buzz, Checkout remained deeply integrated with Google's other products.
Unlike PayPal, Google Checkout is not a stored-value account. To use it, consumers have to link their accounts to a payment card. Google would not say how many people are currently enrolled with Checkout, but the number is likely substantial enough to give Wallet a solid head start when those payment details are linked to Wallet.
With Checkout, Google has "a huge install base, so this really turbocharges Google Wallet," says Aaron McPherson, a practice director at the Framingham, Mass., research firm IDC Financial Insights.
"Their biggest problem now is they've got to get it on more handsets," he says. For point-of-sale payments, Google Wallet works only with the Nexus S handset on Sprint.
Google Wallet currently allows two funding sources: a Citigroup Inc. MasterCard and a Google-branded prepaid account. Consumers who do not have a Citi card can use other accounts to fund the prepaid option.
Once Google Checkout users sign the user agreement for Google Wallet, their "existing payment and shipping information from Google Checkout will automatically be available in your Google Wallet for online use," Google says on its online help center. Those with the Google Wallet mobile app "will also be able to reload your Google Prepaid Card from the payment cards stored in your Google Wallet."
Those who used a Citi MasterCard to enroll with Google Checkout will be able to use that card without going through the prepaid account.
It is likely that a number of Google Checkout users are also Citi MasterCard users, since