

Why Google Wallet Won't Work - narad
http://googlewatch.eweek.com/content/google_wallet/why_google_wallet_wont_work.html

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redthrowaway
Good points. I had recently been juggling the idea of what it would take to
successfully replace cash and plastic with a mobile app, and rollout was a
huge issue.

Depth of penetration is far more important than breadth. Ten thousand users in
a single city is better than a million in a thousand. In order to be viable
for point of sale, you have to give corner stores and drycleaners a reason to
use your service, which means that their average customer has to want to use
it. Sure, you can kickstart the process with big box retail chains, something
that a company the size of Google is well-placed to do, but you'll never be
dominant until you own the mom and pops. Without the ubiquity of credit cards,
replacement mobile payments are at best a neat feature.

The author's second point ties into the first, and is equally valid. There is
no discernible reason why Google would limit itself to a single credit card
provider, unless that was their only option. All this will do is hurt uptake.
The same is true of limiting it to a single phone.

Google needs to learn the Wave lesson, and go big or go home. By so meekly
backing Wallet, they are all but ensuring its failure. This is no Android: it
doesn't fix any big problem for any major player the way Android solved the OS
and marketplace problem for the handset makers. Square works great for small
businesses, especially those who provide on-site service. Wallet doesn't seem
to provide any solutions beyond "paper and plastic are anachronistic". They
really need to identify who their early adopters are going to be and launch a
concerted effort to convert them. Short of that, it's another in a long line
of half-assed product rollouts from Google.

~~~
cleverjake
>>Google needs to learn the Wave lesson, and go big or go home

Do you really feel that Wave failed because they didnt "go big"? If anything,
thats what they DID do. They released a product with so much fanfare that lack
clearly defined use cases. Wallet was /just/ announced. its not even a beta
product yet. They need time to test out locations with a mostly staff lef
trial period in very select locations. They have announced that they want it
to do everything from debit cards to airline and concert tickets.

There is a chicken and egg issue here. Companies need to have readers in order
for people to actually use it, and people need to actually use it in order for
most companies to want to get setup with it.

>>They really need to identify who their early adopters are going to be and
launch a concerted effort to convert them

I would say that launching on an offical Google phone in San Francsico and New
York would be as close to launching for early adopters as one can get. This
/is/ an early adopters product for now, and will be for a while. But you don't
need to convert them - they are the adopters all ready. You need to convert
moms. They won't do this until it is very easy to use and known to be very
secure. How else to do this then a small release amongst high-tech savvy users
in larger cities.

>>Short of that, it's another in a long line of half-assed product rollouts
from Google.

I don't feel that people understand what this product means for Google. Lest
we forget they are an advertising company. What more rich a source of pointed
advertising information than the exact purchases of their user? Barring some
horrific publicity ala Buzz, they are going to sink WAY more resources into
this one mobile product than they would short of android itself.

~~~
redthrowaway
>Do you really feel that Wave failed because they didnt "go big"? If anything,
thats what they DID do. They released a product with so much fanfare that lack
clearly defined use cases.

Wallet _does_ have a clearly-defined use case, however. A small initial
rollout is good if done well. Limiting it to one phone, on one credit card, in
a large area, with no major deals with retailers, just doesn't seem like a
winning strategy. As I detailed above, a limited rollout is fine if it's a
small-scale version of your intended usage. Get _everyone_ in a small area
using it, then expand from there.

>How else to do this then a small release amongst high-tech savvy users in
larger cities.

Everyone in a small area. Even in the Bay Area, tech-savvy early adopters are
too spread out for the network effect to work in Google's favor. Concentration
beats distribution, here.

>I don't feel that people understand what this product means for Google. Lest
we forget they are an advertising company. What more rich a source of pointed
advertising information than the exact purchases of their user?

Exactly. This _should_ be huge for them. Let's bracket the fees they'd collect
if this overtook credit cards as a preferred method of payment and focus
solely on the data they'd acquire from consumer behaviour. This has a huge
amount of potential for them, but it feels like they're doing it Wrong.

~~~
cleverjake
>>...just doesn't seem like a winning strategy Its not a winning strategy, its
a testing strategy. Theyre not going to talk people in Paducka Alabama into
using it. They want it where they are, sf and ny, and are testing it with a
partner. Get it right before you get a million people on board.

>> ...network effect to work in Google's favor What are you talking about
here? What network has to exist? A person signs up, and uses it when it is
available.

I dont understand what it is you think they need to be doing. Why would a
small concentrated area be any better for mass adoption?

~~~
redthrowaway
A smaller, concentrated area would be better for _any_ adoption.

If 1 in 1000 people in a given square mile have access to Wallet, and 1 in
1000 retail outlets support it, what are the chances anyone will actually use
it and give you the data you need to improve it? A far better approach would
be to give it to every google employee and as many residents around Google HQ
as possible, and convince as many local businesses as you can to use it,
covering their costs. _Then_ you start to get an idea of what its real-life
usage cases are, and where you aren't delivering. Giving it to a smattering of
technorati and having a few businesses support it isn't likely to lead to much
use.

~~~
cleverjake
Are you suggesting there would be a peer pressure to use the system? What
would prevent Google from covering the costs of the companies in the rollout?
What is difficult about figuring out what use cases there are? They want to
replace swiped credit cards. Wherever you swipe a credit card - they want to
be.

>>A far better approach would be to give it to every google employee and as
many residents around Google HQ as possible

Theres not preventing this from happening, in fact that kind of is whats
happening already. The announcement only covers general population rollout.

>>Giving it to a smattering of technorati and having a few businesses support
it isn't likely to lead to much use.

"Giving" what, exactly? They are testing a service.

------
ch0wn
I couldn't find any argument on why it will not work. It gives some reason why
it can't work right now, but the service is _five_ days old.

~~~
redthrowaway
So if it doesn't work right now, what's going to make people want to go to
Google six months from now when it _could_ work?

Google's not under any pressure to ship. They should have taken the time to
get it right before they pushed it out the door.

~~~
cleverjake
what makes anyone want to use a product that released a alpha/beta? If its
good. How else would they be getting it right without actual customers using
the server.

~~~
redthrowaway
The staggering local network effect required for mobile payments of this kind
to be good require _many_ people to use it right away. If nobody wants to pay
with it, then no stores will support it. If no stores support it, nobody will
want to pay with it.

This isn't some web app where you can get a few initial users off an HN or
TechCrunch spike and then grow from there. It's completely useless unless a
lot of people in the same area want to use it, in which case retailers will be
incentivized to support it. If you want to do a limited alpha rollout,
convince every store within 3 miles of 1600 Amphitheatre Parkway to carry it
and give out free phones with Google Wallet enabled to 5,000 people in the
area. Work out the bugs, then make a concerted effort to get everyone in the
Bay Area using it. From there you can do a general rollout with support for
every major credit card and national bank, plus deals with the 50 largest
retailers in the country.

The level of clout needed to pull this off successfully makes Google perfectly
positioned to do so. Their insistence on rolling it out as if it were a web
startup all but ensures its failure.

------
haseman
If Google Checkout is any measure, I'm cowering in fear of Google Wallet.

