Ten major US retailers including Wal-Mart Stores Inc. are reported to have started cooperating in effort to create a rival to Google Wallet.
The development has just begun. So, there is no release date as well as no other details. The cost of the project is still unclear as well. Apart from Wal-Mart, the project will involve such companies as Sunoco Inc., Target Corp. and 7-Eleven Inc.
Let’s try to find out whether this project is potential competitive and whether investors should consider this project as a potential investment opportunity.
These days, billions of dollars are being invested in the development of mobile payment systems and e-wallets around the globe. For now, mobile payments cannot be called mainstream. However, more investors bet on technologies of the future. They say mobile payments will be more popular than paying with credit/debit cards or cash.
The payment technology revolves around a mobile app, which allows customers to purchase by connecting their smartphones to special reading devices built in cash registers in multiple stores around the country.
Analysts say the market of mobile payment systems will grow up to $600bn by 2016 as compared to today’s $172bn.
The retailers participating in the development of the new mobile app express hope that their child will make a worthy rival to Google Wallet, which has been available to Android-phone users since 2011.
Google Wallet
Google Wallet was developed by Google, Citi and MasterCard. In order to pay for a certain product in a local store, all you need is to put your smartphone close to a reading device. Moreover, you can pay via Google Wallet anywhere where you can find a PayPass terminal by MasterCard.
The USA counts over 140.000 such terminals. There are nearly 300.000 terminals around the globe. So far, MasterCard is the only global payment system participating in the project. However, Google expects American Express, Visa and Discover to join it in the near future.
The chart below, courtesy of , reflects the current state of affairs in the market of Google’s stock.
At this point, Google Wallet cooperates with 25 major retailers. Google is planning to expand its project outside the USA (especially in Russia and Europe) in 2013.
NFC
Near field communication (NFC) is a set of standards for smartphones and similar devices to establish radio communication with each other by touching them together or bringing them into close proximity.
The technology will serve as the basis of the future mobile payment industry. NFC-payments account for $25bn this year. In 20017, the figures are expected to exceed $180bn.
