In search of the mobile wallet

A wallet full of money and cards
Image caption Google wants to free up our pockets

The mobile wallet is finally going mainstream after years of anticipation.

The end-game for such services is to allow people to pay for goods and services with their mobiles, eliminating the need for wallets full of credit and debit cards.

Google is the latest to get behind the idea of a mobile phone as credit card replacement.

So who are the big players in this burgeoning industry?

Google Wallet

When it announced the service, Google said that it wanted to make shopping easier for consumers, bridge the gap between offline and online commerce and allow merchants to serve up money-saving coupons and loyalty programs.

"Because Google Wallet is a mobile app, it will do more than a regular wallet ever could," the firm said in its blog.

"You'll be able to store your credit cards, offers, loyalty cards and gift cards, but without the bulk. When you tap to pay, your phone will also automatically redeem offers and earn loyalty points for you. Someday, even things like boarding passes, tickets, ID and keys could be stored in Google Wallet," it added.

Although launching with Citi Mastercard, a pre-paid Google top-up card allows users to add any credit card.

Initially it is only available in the US and to those with an NFC-enabled Samsung Nexus S.

Near Field Communication (NFC), is the short-range wireless technology that underpins many contactless payment systems.

While this is a fairly soft launch, most expect Google to quickly expand to other regions and across the whole Android mobile family.

Eric Schmidt has said the mobile money is a key part of Google's strategy for 2011 but many think the mechanisms of payment are not the end-game for the search giant.

"Google's interest here isn't in the payments; it's in the data that underlies the complete chain of commerce including consideration, promotion, transaction details, coupons, and receipts," said Thomas Husson, an analyst with research firm Forrester.

Rivals will be quick to offer similar shopping experiences based around mobile payments, thinks Ovum analyst Eden Zoller.

"It wouldn't surprise me if Facebook offered something similar soon," she said.

Visa Mobile

The credit card company has licensed its PayWave contactless technology to Google Wallet but, as a major player in the field, it also has other projects in the pipeline.

Its own initiative is due to launch this autumn and it has so far signed up fourteen US and Canadian banks, including Barclaycard US and the Royal Bank of Canada.

As well as using the mobile as replacement for credit cards, the service aims to make web shopping more convenient.

Its One Click service means consumers will be able to make purchases online or via mobiles by simply entering an email address, alias or online ID and a password, instead of a billing address, account number and expiration date.

Visa is also partnering with AT&T, Verizon and T-Mobile in the US on a separate mobile wallet service - known as Isis - which is due to launch next year.

"In mobile we want to go broad to make sure a Visa payment option is in as many wallets as there are out there," said a Visa spokesperson.

Orange and Barclaycard

Image caption The Orange service works in stores such as Pret a Manger

Orange and Barclaycard kickstarted the mobile wallet in the UK in May.

Its Quick Tap service is available on the NFC-enabled Samsung Tocco Lite handset.

Only purchases up to a value of £15 can be made using the service but users can preload their mobile with up to £100.

Shops signed up to the system include McDonalds, Wilkinsons, Subway, EAT, Pret-a-Manger and some Boots stores.

"It is going to start a revolution in the way we pay for things on the high street," promised Pippa Dunn, vice president of Orange at the time.

Experts were more luke-warm, saying there was a lack of incentive for consumers to take up such services.

NFC-enabled phones are becoming more mainstream and research firm Forrester has said it expects 40-50 million NFC-equipped phones to be sold in 2011.

The iWallet?

Apple has, in the past, been good at propelling new technology into the stratosphere and there is much excitement around rumours that Apple will include NFC technology in its upcoming iPhone 5.

If an Apple mobile wallet follows, experts expect that a big retail partner will also be announced.

Microsoft is also said to be making plans to incorporate NFC in future Windows phones, as is Blackberry maker RIM.