NFC Times has an article about Google’s new Wallet system that has extensive quotes from Gartner analysts Mark Hung and Avivah Litan. They expect Google to be successful because they are open to so many existing payment systems but think that the lack of POS hardware and NFC enabled devices point to a slow or disappointing uptake for the Wallet offer.
Some key quotes from NFC Times:
“Nevertheless, it (wallet) risks ending up as disappointing as previous initiatives in this area, such as Google Checkout,” said the analysts.
“Merchants typically pay higher interchange fees for PIN-less contactless payments than they do for swiped-card payments that use a PIN at the point of sale,” said the analysts. The Durbin amendment will lower PIN debit transaction fees even more in the United States, they noted, making the difference even larger with PIN-less transactions.
“They (merchants) also must pay for POS reader upgrades to support the NFC payments,” said Gartner. “Merchants will not agree to higher fees and new infrastructure investments unless Google Wallet generates more sales and revenue.”
“This will be a slow incremental value-add for the consumer, limited by the number of mobile devices with NFC capabilities and the initial low level of merchant locations equipped with reciprocal reading devices,” said Yankee Group senior analyst Nick Holland last week. “However, it signals the start of the next generation of consumer interactivity.”
The real quote comes at the end of the article. After discussing the Isis recalibration the analyst concludes:
“But they (telcos) appear to be having difficulty with formulating a business model for Isis that appeals to all parties: banks, merchants and the carriers themselves,” said the analysts. “Gartner believes these carriers will have to quickly create a monetization strategy or consider disbanding Isis and deploying Google Wallet instead.”