Reality Check

In case you missed it, Google released a video last week showing off their new augmented reality glasses. Pretty neat stuff. And now according to American Banker, the glasses can be utilized for financial services.

So far PNC Bank is the only financial institution to offer a use for the augmented reality device — a bank and ATM finder. Pretty handy really, but I am having a hard time seeing how this is much of an improvement over a map on a smartphone or tablet. Do we really need to walk around with a cyborg-like eyepiece and display?

Google should be concentrating on getting Google Wallet off the ground. Launching 10 more Sprint phones supporting Google Wallet at Mobile World Congress was a good start. Previously only the Nexus S 4G offered the required NFC infrastructure. When coupled with the need for retailers to commit to the system as well, the outlook was pretty hazy.

Google did just acquire TxVia, the mobile payments tech company, in theory to shore up the much-criticized security issues hampering the wallet. It’s safe to say Google is not yet ready to abandon the mobile payments ship despite earlier rumors that Google is shelving the project amid all the competition.

And, let’s face it, mobile payments are very popular lately with everyone and their mother trying to get in on the action. PayPal, the incumbent in the online payment space, recently released a card reader aimed at merchants. Called PayPal Here, it was a direct shot across the bow of mobile payments leader Square, and their dongle.

Perhaps some futuristic glasses are just what Google needs to propel them to success in mobile payments. They are creating at least a little buzz in an otherwise dry and jargon-filled market. The glasses actually make a lot of sense in an urban setting, where the real-time information would be most helpful. And let’s be honest, anything would be an improvement over people walking around staring down into their smartphone.

To summarize: we now have a battle royale brewing that includes software, cellphone, banking, and other technology companies; executives bouncing around between competitors; and new players entering the fracas (Tappmo, founded by ex-Google Wallet engineers, to name one).

By the time this is posted the landscape will most likely have shifted again. Don’t forget about Facebook either. They’ve been mentioned on this blog before as another army in the payment war.

It will be interesting to see what partnerships are formed to try to gain an upper-hand in this scrum.

No one knows how long the mobile payments war will drag out and who will be left standing. Or, if they will use augmented reality glasses, a dongle, a camera or some other newfangled, yet to be invented, device to dominate the mobile payments market.

As it stands right now, I’ll take augmented reality glasses over another dongle any day.

About David Sutton: David has a BA in economics and a MS in business journalism, and his articles have appeared on Forbes.com and in the Boston Business Journal. David has had a bank account since he was three.

Mobile Credit Crunch

For a long time now, one key question in mobile banking has been: When? When will the integration of mobile devices and credit cards become truly mainstream, when will one open technology standard (or one clear proprietary winner) emerge, when will the market be described as stable rather than volatile?

The apparent answer still is. . .not anytime soon. But is that a bad thing?

To be sure, there’s no shortage of competitive options. Just a few days ago, FIS released its Mobile Wallet, which enables downloadable proprietary apps from selected financial institutions and retailers. As with other entrants in this market, it gives consumers the option to securely use their credit cards to make purchases via a smartphone either online or at the point of sale.

What makes this market so fascinating is that each new offering joins a lengthy list of innovative options already available from an array of providers.  Credit cards giants such as Visa and Mastercard have entered the arena, as has Internet behemoth Google. PayPal, the undisputed market leader in online payments, has multiple approaches, including its acquisition of mobile payment startup Fig Card. While some financial institutions are waiting it out to see who takes the lead, a few have entered the fray on their own, such as ClearXChange, a joint effort from Bank of America, JPMorgan Chase and Wells Fargo. And of course, as with any emerging market, there are very interesting newer players, including Intuit’s GoPayment and Square, launched by a co-founder of Twitter and now backed partly by Visa. And that’s by no means a complete list.

In other words, there may be just too many intriguing possibilities for a clear consensus to emerge anytime soon. But again, is that what the market needs? Can real growth only come through consolidation and a real standard?

Historically, that’s sometimes been the case. The VCR market saw a battle royal between VHS and Betamax, and it can be argued that only with the emergence of the VHS format did usage explode. The modem market waited for a standard as at least two formats fought for leadership. Microsoft’s DOS, and later Windows, captured a huge lead it the PC arena by beating out the Macintosh and holding off competitors such as IBM’s OS/2.

However, this has definitely not been the case with the mobile market. Apple’s iPhone has both mind and market share, but there are still plenty of other options in operating systems and formats alike, and that’s also the story with tablets.

So maybe the real answer with mobile payments is that, for the foreseeable future, there will be more competition rather than consolidation, and that will drive the market rather than constrict it. Of course, if there’s one prediction in technology that always holds true, it’s that every prediction turns out to be wrong. Any guesses?

 

 

Image: Idea go / FreeDigitalPhotos.net

Google Wallet: How will it affect banks and merchants?

The Google Wallet announcement made a few weeks ago continues to spur discussion of its implications. Banks and merchants wonder how this service will affect their customer interactions, specifically how it will change merchant funded rewards.

Once Google Wallet launches to a wider audience, the company will be able to see purchases customers are making in real-time, and be able to record spending history. The company, who already has come under scrutiny for keeping users search data, will have an upper hand with concrete insight into customers’ spending habits. On the flip-side, banks continue to market this data to vendors, giving them access to customers’ spending habits via merchant-funded rewards cards and incentives.

Daniel Thomas, a Mindful Insights analyst and contributor to NetBanker poses the question, “So, merchants are going to need to decide: should they allow Google to make the reward offer or the banks?  Surely, they won’t compensate both for bringing in the same purchase. That leaves the decision in the hands of the consumers. Do they want to receive points and cash back from Google or from their bank?”

Outside of privacy concerns, what are your thoughts on how the Google Wallet will affect financial institutions and merchants?  Let us know your thoughts by tweeting at @bankingdotcom or responding in the comments section below.