Google Wallet – What Does This Mean to Canadian Businesses?

A few days ago, Google sent out a note to their customers using Google checkout to advise that they will no longer be supporting this service.  In return, they were changing their customer accounts to a Google wallet account.

So what exactly does this mean and how does it affect Canadian merchants?

Google checkout was used primarily in the online space as an alternate payment form.  Google Wallet is a new service that is intended for both the online space and the retail space as the US Market prepares to move to a mobile community.  Mobile payments leverages the usage of NFC (Near Fear Contact) technology.

This technology is already rampant all over Europe and Asia but will it take off here in North America?

The short answer is yes.  Already people use their smartphones for things never dreamt possible 10 years ago.  Smartphones are used as music players, movie players, GPS devices and browsers to name but a few.  In fact, a study performed 2 years ago indicated that people were 60% more likely to turn around and go home to retrieve a forgotten mobile phone over a wallet.  With stats like this, it’s clear to see that North Americans have dependency on their mobile devices that no one could have anticipated when the first cellular phone was launched… you remember that one… the one with the battery pack you had to carry around with a suitcase, had the battery life of two and half phone calls and closely resembled the brick you just used for your patio in the backyard.

So where are the throngs of merchants accepting mobile payments?

In closer inspection, our neighbours to the south are a little closer to this technology than we are.  Google wallet has launched in the US with some big names set up to accept.  Big Box stores like Best Buy are listed amongst the names of merchant currently set up with the technology to accept.  But when reading the information on the product itself, it doesn’t seem to be a simple set up.  It looks like a merchant would need to set up an account direct with Google and it’s unclear what the costs are for implementation.  And speaking of costs… the fees are almost unmanageable!  At an discount rate of over 2% PLUS a per transaction fee of 30 cents, it greatly raises the average cost of transaction processing.  And this is currently only available in the US.

Canada lags behind with mobile simply because the adoption of the technology has been short of abysmal.  Mobile rides on the rails of contactless and right now, I’m willing to bet you can’t name 10 merchants who accept MasterCard Paypass or Visa Paywave.  With Interac Flash rolling out in 2012, this will undoubtedly raise the penetration rate of contactless.  But it won’t be until contactless is almost ubiquitous before Canada will see it’s first mobile transaction.

So while this announcement is a step in the right direction for North Americans, Canadians will only be using our mobiles to update our Facebook statuses for the time being.

Have a Question?

Ask One of Our Expert Merchant Account Brokers Your Question By Filling Out The Form Below. We Will Get Back To Very Quickly.
  • All questions are kept confidential and not posted publicly.
  • What is your most important question about payment processing.

Tags:

About Admin

Matthew Hunt has been helping small businesses get set-up with Canadian Merchant Account Services since 2007 and helped 1000's do so. Join Matthew on Google+.

Comments are closed.