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In comment today, analysts' Ovum say, however, that the move into mobile payments is significant for Google as it presents an 'opportunity to drive new revenues besides advertising, the long-standing bedrock of Google's business.'
According to Ovum principal analyst, Eden Zoller, Google has several related services alongside the new Google Wallet offering that if pulled together effectively could make for a 'compelling commerce framework with increased revenue potential.'
And, US publication eweek.com - https://www.eweek.com/ - reports that Google may have potential, but the search giant still has 'a lot of work to do and it will likely face lots of competition.' eWeek also says that more devices will support Wallet in the future, but until that day comes 'don't expect its service to be too well-known outside certain circles.'
Ovum's Zoller comments that Google is the master of search, provides popular location services, is building up a social media play in the shape of Google +, has a Groupon type proposition via Google Offers and is 'carving out a strong position in the mobile device value chain.'
'If Google is smart then Google Wallet could be about a lot more than just mobile payments and incorporate loyalty schemes, check-ins, and advertising, among other things,' Zoller suggests.
According to Zoller, the challenge for Google is how quickly it can build up a compelling commerce operation of this kind in face of very competent rivals that are aiming to do exactly the same.
'The line-up here up includes Amazon, Facebook, Paypal, telecom operators like Orange France and social commerce providers such as Groupon and Living Social.
'Google will also need to be very mindful of privacy issues. A payments service like Google Wallet linked to location presents a gold mine of customer and transaction data that Google will inevitably want to exploit. But it must only do so in a way that respects privacy and guarantees security. If it fails to do this it will lose consumer trust and credibility among commerce partners, and without this its commerce ambitions will come to nothing,' Zoller warns.
