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Google Wallet expands discount and rewards program

Oct 18, 2011 — by LinuxDevices Staff — from the LinuxDevices Archive — views

Google has opened up the SingleTap payment system in its Google Wallet service, allowing consumers to pay for goods and redeem discounts and rewards in a single near field communication (NFC) transaction. Meanwhile, ABI Research forecasts that 78 percent of NFC-enabled handsets will ship with an embedded secure solution in 2016, and almost half will offer multiple secure elements.

Google has added the ability for consumers to not only pay for goods purchased from certain retailers with the Google Wallet service, but also redeem coupons and earn reward points in the same transaction. For example, consumers can walk into a Jamba Juice or other SingleTap program retailer with their Android-based Samsung Nexus S 4G smartphone and order a beverage via the phone's near field communication (NFC) radio. 

When consumers get to the checkout counter they could tap their Nexus S 4G (pictured) against a point-of-sale system and pay for the drink. Wallet will deduct a consumer's digital coupon without making them whip out a piece of paper or rewards card to get stamped.

Other participants joining Jamba Juice in the  Google Wallet SingleTap effort include American Eagle Outfitters, Foot Locker, Guess, Jamba Juice, Macy's, OfficeMax, The Container Store, and Toys "R" Us.

Google launched its Google Wallet mobile payment service Sept. 19 in New York City and San Francisco. The service leverages NFC short-range wireless technology to let users tap Android smartphones against NFC-enabled checkout systems to pay for goods. Wallet will work at over 20 retailers and restaurants, and Visa, American Express, Citi, MasterCard, and Discover have all joined Wallet as credit card partners.

While the service appears to have made some strides, there are certain challenges. The most glaring is the fact that Wallet will only currently work on Sprint's Nexus S 4G. Google is working hard to enable the Wallet application on additional Android phones, although few to date offer the requisite NFC chip and associated "secure element."

Another challenge is giving consumers the incentive to use Wallet. Google and its Wallet retail partners are trying to entice shoppers with coupons and deals. Retailers offer coupons and rewards points for frequent shoppers, while Google has set up Google Offers, a local deals service that has spread across the country to challenge Groupon and LivingSocial in roughly 40 markets since April.

To that end, the Offers tab in Google Wallet now boasts a new "Featured Offers" section with discounts that are exclusive to Google Wallet. Currently, these include 15 percent off at American Eagle Outfitters, 10 percent off at The Container Store, 15 percent off at Macy's, and a $2 smoothie at Jamba Juice.

Again, no paper is involved. Instead, users save favorite coupons in Google Wallet so that they'll be cashed in via SingleTap. Another perk: Foot Locker, Guess, OfficeMax, and American Eagle Outfitters are providing loyalty cards for Google Wallet to help users accrue reward points as they shop.

"It's still early days for Google Wallet, but this is an important step in expanding the ecosystem of participating merchants to make shopping faster and easier in more places," stated Google Director of Emerging Markets Spencer Spinnell.

ABI sees $1.3 billion NFC market by 2016

ABI Research forecasts that 78 percent of all NFC-enabled handsets will ship with some form of embedded secure solution in 2016. While today there are only a handful of NFC-based mobile payment solutions, including Google Wallet, the number of services will greatly expand in the coming years

Each of the services will require its own secure cryptographic element, the research firm adds. Therefore, phones and other mobile devices will need to integrate multiple secure elements in addition to the NFC radio.

Some 552 million NFC handsets will ship in 2016, and almost half — 227 million - will feature "multiple" secure elements, projects ABI. The increased inclusion of multiple secure elements will drive the mobile NFC market valuation to the $1.3 billion mark in combined revenues, says ABI.

Although mobile carriers favor the emerging ETSI standard SWP (Single Wire Protocol) implemented in SIMs, the market will develop with both SWP and embedded secure-element solutions, says ABI. Improved IC designs that combine an NFC radio controller and secure element will eventually result in most handsets shipping with an embedded solution as standard practice, says the research firm.

Stated John Devlin, group director, security and ID, ABI Research, "The ongoing uncertainly over secure elements and ownership will drive IC vendors to develop a variety of competitive solutions, including integrating the NFC RF in a combo connectivity IC or the baseband, embedding the secure element and controller together, as well as standalone solutions."

The findings are part of an "NFC ICs and Devices" study set for publication in the fourth quarter.

Clint Boulton is a writer for eWEEK. Eric Brown contributed the ABI Research portion of this story.

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