Why Google Wallet may find Subway is a key to its success

Mobile Payments

Contactless Payments
Retailers and restaurant chains such as Subway that are selling goods for low prices in locations across the country may be just the boost that Google needs to succeed in its new mobile commerce service.

Since Google Wallet was first unveiled in May, consumers have remained skeptical of this mobile service application. The service allows users to store their credit cards on their smart phones in digital format so that they can use the handset in order to make purchases at points of sale at various retailer that are enabled to receive this type of transaction.

The service has just become available across the country, but is currently limited to Sprint customers with a Nexus S. model smartphone.

ABI Research estimates that there are around 400,000 people with Nexus S phones, though this number has not been confirmed as Google does not disclose its sales numbers for this device. That said, there are currently over seven million American iPhones in use.

Regardless of these low numbers, Mark Beccue, a senior analyst at ABI Research, stated that Google Wallet is “less narrow than it appears”. He said that there is still a chance that consumers may embrace this technology provided that merchants, such as Subway, will sign up as launch partners.

According to Beccue, the critical element to ensure that payments using near field communication (NFC) – which is the foundation technology of Google Wallet – will be its merchant strategy. As of yet, the strategy involves drawing retailers who sell the type of products that consumers purchase on a regular basis and that have a large number of locations across the country, such as Subway.

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