Google Wallet takes NFC to the next level

John C. Tanner
Telecom Asia

Optimism was high at this year's Mobile World Congress that 2011 would be the year that NFC finally started to take hold. The GSMA has over 60 NFC trials running under its Pay Buy Mobile initiative, and numerous device makers announced commitments to produce more NFC-compliant devices this year, including, Samsung, ZTE, RIM, Nokia and LG.

Yet somehow it figures that for all the renewed mobile industry commitments to NFC, it's Google generating all the hype. (See related article "Have we missed the boat - again?"

The search giant has been talking up NFC for some time, and earlier this year announced native support for NFC in Android 2.3, and said its upcoming Samsung-manufactured Nexus S smartphone would have an NFC chip in it.

Last month Google made good on that promise with the launch of Google Wallet, the centerpiece of which is the Nexus S. Google is offering the service in New York and San Francisco to start, in conjunction with Sprint, Citi and MasterCard. In addition to offering the usual contactless-payment services (either via MasterCard's PayPass reader or the new SingleTap payment reader), another feature of Google Wallet is Google Offers - Google's version of Groupon - which enables users to redeem local Offers coupons via the Wallet service.

What's interesting is that while Google Wallet is hardly the first NFC-enabled payment service to make headlines this year, it's arguably created the most buzz. Granted, Google does that with virtually every new announcement it makes, but one reason Google Wallet is buzzworthy is how it leverages two key elements - smartphone apps and, basically, Google's entire business model - to take NFC services well beyond the realm of simple contactless transactions.

Technology-wise, NFC is reasonably mature, and the GSMA's Pay Buy Mobile push has helped give it the structure and security it needs to be deployed on the global scale that the GSMA typically requires. But for companies like Google, it's not so much about the core technology as the apps and functionalities you can plug in on top of that to create something with far more value than simply paying bus fare or buying a drink from a convenience store.

Google Offers is a prime example, but Google Wallet aims to enable all kinds of functions that could use NFC to turn your phone into a driver's license, hotel keycard or boarding pass, as well as allow you to keep tabs on things like gift card balances and mobile ticketing.

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