Google WalletBusiness Model1

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About Google Wallet

Google Wallet is a mobile payment system developed by Google that allows its users to store debit cards, credit cards, loyalty cards, sales promotions, gift cards, etc. on their mobile phone. Google Wallet uses Near Field Communication (NFC) to make secure payments fast and convenient by tapping the phone on any PayPass enabled checkout. The service works with the 300,000+ MasterCard PayPass locations and Visa’s payWave system. Google Wallet’s newest feature allows user to send and receive money through Gmail attachments.

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In the past few thousand years, the way we pay has changed just three times—from coins, to paper money, to plastic cards. Now we’re on the brink of the next big shift. We are introducing the Google Wallet as the newest, mobile payment system.”

Competitors:Apple PayPayPal WalletSamsung PaySoftCard

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Customers and Value Proposition

Consumer segments

Google Wallet aims to be the future of money payment and transfers. It is for people who want the convenience of their entire wallet integrated into their beloved mobile device. Since it is a new product, the Wallet is currently targeting early adopters. These are consumers who are highly engaged in their mobile devices and desire to have the latest technology in their hands. Research shows that the people between the ages of 18-34 are more wiling to adopt the mobile banking system

The Value Proposition

Google Wallet makes payments online and in-store faster, more secure, and easier to manage by integrating payment methods into a mobile app and email.

Competition

•PIN based authentication system •Saves card details on servers and issue virtual card on your device•Tracks transactions•100% security with its Fraud Protection

• Touch ID Technology for authentication

• Tokenization system: card details link directly to bank and then given a Device Account Number (DAN)

• Does not track transactions

Google Wallet and Apple Pay are the leading mobile payment systems and each other’s biggest competition.

The main differences are in security. While Apple uses Touch ID for authentication, the Google Wallet uses a traditional PIN based authentication system. Although the touch ID is easier to use, Google’s PIN ID allows users to access the Wallet on older hardware.

Another difference is the way that a user’s card information is saved, but both are secure channels.Google Wallet strives to be a literal virtual wallet so the service tracks all transactions like a receipt. On the other hand, Apple Pay declares it will never track transactions.

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Channels & Customer RelationshipChannels

Google Wallet’s channels for usage are:• Mobile Device App • Gmail • Wallet Card

In today’s age, most mobile devices come pre-installed with NFC technology that enables phones to connect to the MasterCard PayPass and Visa payWAVE readers located at many retailers.Google Wallet can be used online to exchange money through Gmail attachments.The Wallet Card allows people to pay with their Google Wallet Balance in-store at millions of Debit MasterCard locations and withdraw cash at ATMs.

Customer Relationships

Google gets their customers through advertisements on TV and online that make the Google Wallet look like the next greatest innovation in money management. Since some cell phone carriers have the Google Wallet app pre-installed onto their devices, customers are more inclined to use it when they purchase a new phone. Lastly, Google loyal customers who are interested in mobile-payment systems would prefer Google over other competitors such as Apple Pay due to their trust in the Google brand.

Google keeps their customers by providing rewards relative to the usage of the Google wallet, promoting all the available locations compatible with the Wallet and ease of transferring money through Gmail, and providing excellent customer service.

Google can grow their customer relationships by providing more services and features through the Wallet to create more value for consumers, and expanding NFC capabilities to more locations in order to give consumers more opportunities to use their Wallet.

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Key ActivitiesTechnology developmentGoogle must continue to develop the software behind the Wallet app, email component, and card in order to make all transactions quick, easy, and secure for their consumers.

Expanding NFC LocationsIn order to attract more consumers and satisfy their current users, Google has to increase the number of NFC locations to encourage consumers to use the Wallet everywhere they go and increase their convenience. Google must contact popular chain stores and reach an agreement with them to install NFC readers in their stores.

Educating the MarketTo increase their consumer base, Google must efficiently market to and educate their target segments. This would involve online and television ads that show the ease and convenience of using Google wallet to the mass market.

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Resources and PartnersGoogle’s major partners are:

• MasterCard• Visa• ViVOtech• Participating Stores• Cellular Carriers

Google’s partnership with MasterCard and Visa has allowed the Wallet to use pre-existing NFC hubs to connect to their service. This has provided incredibly value because Google did not have to create and install their own NFC infrastructure within stores across the country. Instead, they partnered with companies who possessed the existing technology. Google has also entered into a partnership with ViVOtech to produce their own NFC software.Major chain stores including Walgreen’s, Subway, Jamba Juice, Macy’s, Footlocker, CVS, and more are supportive of the Wallet concept and will install NFC readers if they don’t already have them.Cellular Carriers are a major partners because they must enable their devices to use NFC with a digital wallet. AT&T. Verizon Wireless, and T-Mobile have the Google Wallet pre-installed. If the carrier is not compatible with the wallet, users can only access the Google Wallet online.

Resources Partners

Google’s main resources consist of:• Human capital• Google brand name• NFC Technology• Gmail

The human capital is made up of the skilled labor that codes and builds the services behind the Google Wallet. The Wallet could not be possible without their knowledge and expertise.The Google brand is a recognizable name that consumers already have trust in due to past experiences with their products and services. This familiarity and confidence in the Google brand makes consumers more inclined to try Google Wallet over other competitors.The NFC short-range wireless technology is a primary component behind Google Wallet. It is what allows contactless payments at checkout in stores. It is essential to the success and value of the product. Wallet utilizes existing NFC readers and has partnered with ViVOtech to make NFC software.Google has capitalized on their integration with Gmail through the Wallet for money transfers. The ability to access Gmail gives the Google Wallet and extra benefit and increases its value.

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Key Partners Key Activites ValueProposition Customer Relations Customer Segments

Key Resources Channels

CostStructure Incomes

Keep

Grow

Get

Google Wallet’s Business Model

We use the Business Model Canvas to represent in one visual shot this company business model.

MasterCard

Visa

Participating Stores

Cellular Carriers

Technology development

Expanding NFC Locations

Educating the Market

Human capital

Google Brand Name

NFC Technology from VISA, MasterCard, & ViVOtech

Gmail

Sponsor AdsTechnology growthResearch and DevelopmentPartnership with MasterCard and Visa TechnologyMarketing

Google Wallet makes payments online and in-store faster, more secure, and easier to manage by integrating payment methods into a mobile app and email.

Mobile Device -MasterCard PayPass -Visa payWAVEGmailWallet Card

Early Adopters

Primary Target Age: 18-34

Secondary Target Age: 35-54

Tech-Saavy Individuals

Highly engaged with mobile device

Advertisements online/TVPre-Installed on DeviceGoogle-loyal customers

RewardsPromotion of benefitsExcellent Customer ServiceProvide more services Expand locations with NFC

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ChallengesLack of usersAs revolutionary as the Google Wallet was, consumers had no desire to use the product. Since it is a new concept, Google would have to grab the attention of the few early adopters ready to try the Wallet in its initial launch. In addition, Google must compete for users with Apple Pay and PayPal,

SecurityGoogle had a few problems at first with ensuring that all the user’s personal and credit card information was secure. Consumers will not be willing to put all of their financial data into an app that can’t keep it safe.

Lack of NFC enabled devicesThe Google Wallet may be incredibly useful but if there are not many devices that are compatible with NFC tech, will the Wallet be used at all? Non-NFC devices include the Android 4.0.3 or higher and iOS 6 systems.

The Role of InnovationGoogle entered a market that would define the future. As first movers into the mobile payment technology field, the Google wallet was created to utilize cell phones in order to make the transfer of money more easy, quick, and secure.

Instead of creating and implementing their own Wallet reader technology, Google joined in partnerships with MasterCard and Visa to use their NFC readers that were already installed in more than 300,000 locations. This strategy saved them time and prevented extra costs.

The multiple channels to access Google Wallet allow consumers to use the service through an app, email, or card. These various aspects of Google Wallet are some of its main differentiating factors from other competitors.

The FutureGoogle continues to market the Wallet through ads to gain consumer attention and app downloads. As they increase the number of NFC locations and compatible NFC cellular carriers, the popularity of the Wallet will rise. The Google Wallet is leading the way into the future of money.

Profit Model

Network Structure Process Product Performance

Product System

Service Channel Brand Customer Engagement

CONFIGURATION OFFERING EXPERIENCE

What makes the difference

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Bibliographyhttp://www.cognizant.com/InsightsWhitepapers/Segment-Based-Strategies-for-Mobile-Banking.pdf

http://www.slideshare.net/rapidsofttech/google-wallet-11542603

https://www.google.com/wallet/

http://electronics.howstuffworks.com/google-wallet.htm

http://www.engadget.com/2014/10/29/week-apple-pay-google-wallet/

http://www.cnet.com/news/could-google-wallet-be-googles-next-failure/\

http://www.investopedia.com/articles/personal-finance/010215/apple-pay-vs-google-wallet-how-they-work.asp

Authors:

Minty Thomas and Neo O Nanna from the University of Texas

Reviews by:

Miquel Angel PérezFerran Sesplugues