Google recently introduced changes to its mobile-payment system, this move will let Google have an edge over the consumers' "digital wallets."
The change will allow consumers to upload his credit/debit card number onto a software application, and then purchases can be made using smartphones, thus removing the difficulty of enrolling in a mobile payment service.
Visa, MasterCard, PayPal are coming out with various systems that convert a users handheld into a payment device.
Competition has been fierce in this sector, though Google was one of the first who made Google Wallet commercially available, the adoption rates have been limited. Other obstacles for low adoption include certain technicalities like requiring partnering with specific banks.
Initially Google partnered with Citigroup to make consumers use Google Wallet, it wanted to slowly work with other banks, and they would have to help customers enrol into the payment service. But they realised this will be a slow process.
"This was an approach that from a negotiation and integration standpoint could take several months to a year. Given how many banks there are in the U.S., this approach could literally take a lifetime to work through," said Robin Dua, head of product management for Google Wallet.
Now consumers can individually upload their card into a cloud-based program without the bank's intervention. They will then be linked to Google Wallet-housed separate MasterCard-branded virtual account. So when a consumer makes a purchase, the amount gets transferred via that virtual account but the credit/debit card finances the purchase made.
"Issuers no longer have to do that heavy integration work," Dua said.
Google will be still working with the banks if they want them to be represented visually in the software application.
This makeover by Google will help them edge-out other competitors like PayPal who have their own mobile payment system setup.
Visa, American Express, and MasterCard are coming up with their own mobile payment systems.
It is estimated that the transactions in this sector might reach $617 billion worldwide by 2016, according to the research firm, Gartner Inc.
Users can deactivate their account online in the event their handheld gets lost or stolen. Google Wallet relies on NFCs and is compatible with American Express, Discover Financial Services, MasterCard, and Visa.
