With Google’s launch of a highly-anticipated mobile payments app, the big question for third-party developers is how much access will they get?
Google Wallet, launched today in New York, is a payment app that turns people’s phones into their wallets — a vision anticipated long before even the advent of smartphones. For years, Asian markets like Japan have led the U.S. in terms of mobile payments. But with Google’s launch today and Visa-backed Square’s new consumer-oriented strategy unveiled this week, 2011 may finally be the year mobile payments come of age. (Visa is not involved in today’s launch even though Citi, First Data and Mastercard are.)
Details were scant for developers but it appears that Google intends to release a series of APIs that would allow users to transfer their offers, get access to their receipts and participate in loyalty programs. There will also be a set of APIs for banking partners that should make it relatively easy to integrate different types of payment instruments.
Ultimately, the plan is to bring Google Wallet to a greater number of devices beyond the sole compatible phone today, the Nexus S 4G on Sprint. Considering that a big emphasis at this year’s developer conference I/O was Android-compatible accessories and non-phone or tablet devices, there could be some interesting integration possibilities in the long-run on many everyday devices beyond phones.
Although he is part of a different division internally at Google than the one overseeing Wallet, the group manager for Android Eric Chu has told us in the past that he intends for developers to have some level of access to NFC, although he didn’t offer too many specifics. “Stay tuned,” he’s told us.
A question on this front is whether Google can manage its internal politics. Any kind of mobile payments platform for developers would likely be under the purview of two separate fiefdoms inside Google: commerce under Stephanie Tilenius and Android under Andy Rubin. We’ve heard in the past that relations between the two have not always been smooth. (Consider the fact that a Paypal integration with Google Checkout in Android Market hasn’t launched for years.)
Another question would surround security, should third-party developers gain some level of access to NFC. For now, Google says financial data is stored in a chip called the ‘Secure Element” on the phone. Google says there are “strict access policies so that malicious applications wouldn’t have access to data stored by Google Wallet.” The company adds that the Google Wallet app itself doesn’t have read or write access to the ‘Secure Element’ containing a user’s credit card information.
Google says it’s not taking any fees for transactions facilitated through the service. So it would seem premature to wonder about any fees or revenue splits for third-party developers at this point.