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Will Google Wallet Gain Momentum on Virgin Mobile?

Will Google Wallet Gain Momentum on Virgin Mobile?
May 11, 2012 6:32PM

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Heavy marketing is required to get consumers to change behavior, said analyst Rob Enderle. Google wants consumers to stop using plastic credit cards and start using Android phones with Google Wallet. "If you don't know you can do it you won't do it, and if you don't do it a few times you won't get into the habit of doing it," Enderle said.

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Google Wallet hopes to make a comeback -- or at least turn some heads -- when it debuts on its second device. After a poor reception on Sprint in September, Google Wallet is about to show up on the LG Optimus Elite through Virgin Mobile.

Google Wallet is a free Android app that lets customers turn their smartphones into wallets and make purchases with the tap of the phone. The app stores virtual versions of your credit cards, offers and loyalty cards on the smartphone.

Google Wallet currently supports Citi MasterCard credit cards and the Google Prepaid MasterCard, powered by First Data. Google plans to support additional cards. Some of the hundreds of thousands of participating retailers include American Eagle Outfitters, The Container Store, Macy's, Foot Locker and Subway.

Google Wallet's Slow Take-Off

The Optimus Elite debuted on Sprint's network on Sept. 20. Now, Virgin Mobile is getting into the Google Wallet game by offering the device, which features Android 2.3 Gingerbread. In order to run Google Wallet, smartphones need NFC, or near-field communication, capability. NFC is a short-range communication protocol that's similar to Bluetooth.

The Optimus Elite also offers a 3.5-inch capacitive touchscreen, 800 MHz processor, 5-megapixel rear-facing camera and camcorder with flash, virtual QWERTY keyboard and mobile hotspot capability. Consumers can also download Box on LG Optimus Elite and get 50 GB of free cloud storage and sharing directly from LG.

We asked Rob Enderle, principal analyst at the Enderle Group, how Google Wallet is performing in the marketplace. His answer: Adoption is still slow.

"Because Google owns Android, we thought Google Wallet was going to be a bigger thing sooner," Enderle told us. "But the fact that this phone is coming out from LG might indicate that we are on the front edge of what could be a Google Wallet movement. On the other hand, Google almost always underfunds their efforts and that tends to make them burn out rather than find success."

Marketing the Value

As Enderle sees it, heavy marketing is required to get consumers to change behavior. In this case, Google wants consumers to stop using traditional plastic credit cards and start using Android phones with Google Wallet.

"If you don't know you can do it you won't do it, and if you don't do it a few times you won't get into the habit of doing it," Enderle said. "So it's one of those things where Google has to get you to try it, and then they've got to reinforce the experience so you keep using it, and then eventually leave your credit cards at home."

After Google announced its innovation, eBay-owned PayPal filed suit against Google and two executives for allegedly stealing trade secrets that helped Google develop Google Wallet and push for a piece of the multibillion-dollar mobile-payments pie. Paypal's aggressive stance may hint at what is at stake.

Tell Us What You Think
Comment:

Name:

Mike:

Posted: 2012-05-19 @ 1:40am PT
I really want NFC payments to take off. They've had it nice in Japan. I hate having to carry cards and cash around. Too bad this phone is very low spec. If they brought it to Boost, I'd be quite tempted.



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