Mercator Perspectives

Google Reorganizes Its Payments Efforts

One of the highest profile spats between Google and PayPal was the search giant’s hiring of two former leaders, Stephanie Tilenius and Osama Bedier. PayPal shortly sued Google over the IP it claimed both brought with them.

But the real competition, of course, is in the marketplace and there PayPal is in the lead. PayPal is piloting its cloud-based wallet at the point of sale with Home Depot and Ingenico. It’s working with many players in the acquiring network between the POS terminal and the card networks. PayPal’s demos at the National Retail Federation Show, and the buzz generated, were of great interest.

Google’s commerce effort has been floundering by comparison. Its mobile wallet (based on NFC-equipped smartphones) is only available on a couple of devices on the Sprint network. It’s also shut out of Verizon and AT&T mobile networks who favor their own, eventual, ISIS wallet. And while Google Wallet does have cloud-based capability (Google Checkout is now part of Wallet), almost no one has paid attention to that fact.

Because of that lack of success, as this release shows, Google has decided to reorganize Tilenius’s responsibilities.

Turns out it’s easier to take a cloud wallet and, despite the fog of complexity, get it to the point of sale than to take a hardware-based approach (NFC) with the wallet at the edge of the network and connect that to the payment network. Perhaps another way to look at it is –it is simply easier for an upstart payments company like PayPal to work with the incumbent payments ecosystem.

But don’t bet against Google. Some out-of-the-box thinking, a re-focusing of effort, its data resources, and its cash provide plenty of potential.

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