The relationship between Google Wallet and Google Checkout has always been a bit confusing. Essentially Checkout was Google’s PayPal competitor for merchant payment processing. It has been around for roughly seven years. It never really got traction, in part because Google didn’t aggressively promote it.
Google Wallet is Google’s mobile payments platform, the major component of which has been in-store NFC payments. It also hasn’t seen much adoption, though that may change. It also can be used to store coupons and offers.
Some time ago Google merged Checkout into Wallet. This was a bid to unify the two products. The pitch to consumers was “one wallet for online and in-store shopping.” And that’s still the pitch. It’s the merchant side of things that has changed.
Yesterday Google announced that it was shuttering Checkout (I thought the product name had gone away). The company said it will continue processing payments online until November of this year. Thereafter merchants will need a new payment processor. Google is sending people to Braintree, Shopify and Freshbooks.
If merchants do have current payment processing Google is encouraging them to apply for what it calls “Google Wallet Instant Buy.” The idea is to remove friction from mobile buying by eliminating the need to enter credit card data and other related information (e.g., billing/shipping address). The solution is directed at Android app developers. (I suspect Apple will eventually do something similar with iTunes.)
Entering credit card data and related shipping/billing information on a smartphone is a major barrier to so-called “m-commerce.” More than 90% of mobile users abandon shopping carts, partly for this reason. Security is another concern for many. However if Google Wallet Instant Buy is widely adopted by Android developers (there are no additional fees or changes from Google) it could have a major positive effect on mobile buying. Stored credit card data in one of the factors that has enabled Amazon to become the mobile commerce leader.
Google has also introduced a Google Wallet Objects API, which allows merchants to integrate their loyalty programs into Wallet and more broadly promote them to Google users. And, as we previously indicated, Google has also introduced the easiest possible P2P send money solution through Google Wallet (via email attachment).
Google has thrown in the towel around merchant payment processing (Checkout). But it has introduced pretty compelling new features for consumers and merchants that should make Wallet a much stronger and more broadly useful product.