Digital Wallet: NFC’s, Google, and Square

I’ve written about the coming of Near-Field Communication (NFC) devices a few times here. You can refer back to these posts for a bit of a primer. In the past few weeks though everything has really started to take off, and in an area that I really don’t plan to use that much.


First, meet Google Wallet.Google Wallet Logo Google’s new service allows you to essentially embed the same data that would be transmitted using prior NFC technology, notably MasterCard’s PayPass system except this time the data is phone accessible and put out by the phone’s internal NFC chip. Cool, eh? Instead of wiping my debit card over a PoS terminal, I could wave my Android-based phone. Aside from the geek factor, or perhaps more aptly put: the novelty factor I find myself wondering how this could be extremely useful. I’ve done the PayPass thing once at a 7-Eleven to pay for my slurpee– it was odd, the checker had no idea what I was doing, and still I had to do it twice for the thing to go through– he had to manipulate something on the terminal first. Couple things I learned that day– It was only useful for purchases under $10, and aside from using it someplace small (like 7-Eleven) where the hell are you only spending $10?

Of course, this is good for MasterCard and other CC companies– they charge upwards of 5-10% of each transaction that runs through that terminal. By making it easier I’m sure they’re gaining an impressive revenue streamer. If you’ve got a friend who owns a small business (like me) ask em what they lose on CC transaction fees. It’s quite ridiculous.

So your credit card company gets some good stuff out of it, but what about you? Google Wallet aims to make it easier to track fraudulent purchases or inspect some of the data about your purchase. Of course, Google has to get their’s too so somewhere that data can be anonymized to help make the Google system better. Do you want that? It’s up to you– I use Google Checkout and a host of other services provided by the big G, and while I am cavalier about it…somewhere you’ve gotta draw a line.

On the other end you have a (relatively) new kid on the block, Square. Square provides a cool headphone-based dongle that allows anyone, anywhere to record a transaction with a credit card and get money.Square in Action For the small biz owner, or the need to grab funds from an acquaintance or friend is quite useful. Square charges 2.75% of the total transaction, much less than owning a CC terminal with any of the “Big Three”. I myself own a dongle (partially because it was free to get), but have yet to use it in a biz transaction. It seems much easier to send off invoices and wait for folks to pay you.

A couple of weeks ago the Apple rumor mill went active with mutterings that Apple would start using the Square devices in-store to replace their handheld POS-CC readers that are packaged as “gloves” around the iPhones in store. Square did indeed launch something, but nowhere near as large as “teh interwebs” were making it out to be. A digital wallet sure, but in essence many virtual cards that were to be used at specific retailers. Personally I think that’s the wrong way to head, but I’m not an investor in Square. Anyway, I thought this would be a huge mistake because I feel that Apple will have to include NFC capability in the next iDevice they release. Google’s Nexus S already has the tech built in, and I think they’d be stupid not to include it in the next iteration.

Can I let slip what I really want this tech for? Identification. Screw payment stuff, it’s got higher-than-normal security issues, and someone else is making the cash. I looking to abolish things like Tradeshow badges, stickers that say “Hi, My Name Is”, and create some really cool uses for this extra bit of data. Think about it: It’s Bump without Bumping, it’s Bluetooth transfers finally, the way they were meant to be designed. It’s the old several connected devices. It’s your personal cloud, all the time. Sure it has some risks, but the first uses of this technology are going to be nifty.

Disclaimer: I own Apple and Google stock.