Up & Right

I am a hands on guy. I’ve always believed that one of the best ways to understand technology is to actually use it. So with that in mind, I recently went out and bought the Nexus S 4G on Sprint which is the first mobile phone to support Google Wallet. I’m keenly interested in next-generation mobile financial services so I needed to try it for myself. Here’s what I learned.

I used the Nexus + Google Wallet twice in one day to pay for NYC taxi fares. The first time it went off without a hitch—I was feeling pretty good about it! However, the second time was the learning experience. I’m sitting in the cab composing an email and I lose track of time. The next thing I know the cabbie is asking me for the fare and we’re stopping traffic on a cross-street in NYC. So what do I have to do?

1. Stop writing my email (after a couple more taps of course) and save the draft
2. Leave my Inbox app and head to my Android home screen
3. Hit the icon that shows all my Android Apps
4. Flick to scroll to find my Google Wallet app
5. Launch Google Wallet 
6. Enter my four digit PIN
7. Select “Payment Cards” from the Google Wallet home screen—tapping three times because the app is unresponsive the first two times
8. Tap my phone against the NFC reader in the cab

WOW SO MUCH EASIER THAN CASH OR SWIPING A PLASTIC CREDIT CARD! Not really. In fact, this was kind of a pain in the ass. My point is simply that much of the hype around NFC comes from increasing the velocity of card-present payments, but this is clearly not a bulletproof argument in reality.

I also don’t believe the “disappearing wallet” claim, at least not in the near term. I’ll still need my driver’s license and a few other pieces of plastic and paper that can’t / won’t go NFC for long enough that I’ll need a wallet anyhow…plus, plastic credit cards have *awesome* standbye time relative to my Nexus S 4G which has been known to run out of batteries in less than 12 hours. (It would be no fun to be stuck with a dead cell phone and not a single dollar to get home.)

What does this mean? It means for e-wallets and NFC to survive and thrive, there needs to be new and interesting value propositions to consumers. The value prop may come from customer loyalty, couponing and Groupon-style deals / discounting. That’s what people are talking about now at least—and I think that will be part of it but not everything.

Another possibility is speeding up ecommerce. Imagine an e-wallet that launches when you go to checkout from an etailer on your mobile phone. The etailer’s checkout process makes an API call to your phone that open’s Google Wallet. You enter your PIN and you are done. You never have to be a data monkey on an awkward virtual mobile keyboard. That would be huge for both merchants and consumers.

I also think NFC and e-wallets could have uses that aren’t obvious. For instance, when GPS was making its way into phones six years ago who could have predicted FourSquare as an end-user application? Hardware is often like that: you put it out there and then the developers figure out what to use it for. I’m excited to find all of the innovation going on and coming in this space.