The payment processing industry has always been a battleground with many merchant service companies fighting to gain market share. The industry itself is over 50 years old, and has come a long way since the days of the Diner’s Club Card and carbon-copied credit card receipts. However, the last 12 months have brought on some of the biggest changes, and have the potential to dramatically change a once stable industry.
In May of this year, Google announced a new product that could potentially revolutionize the way in which consumers pay for goods and services. Since the introduction of the Diner’s Card was established in 1950, credit and charge cards have been just that; a card. However, Google and it’s new partner, Citibank, are looking to change that. They are introducing Google Wallet later this year, which allows a person to link their Citibank credit card account with an Android-based smartphone and use it instead of a physical card when making purchases.
The technology is not new. In fact, it has been used in credit and debit cards for some time. A near-field communication (NFC) chip will be installed into specific Android-based phones and programmed to a card number. Consumers will then be able to swipe their phone in front of chip-reader enabled point-of-sale terminals and charge transactions directly to their credit card account.
Since NFC technology has been around for almost 10 years, there are many merchants already set up to accept this method of payment, including most large retailers, supermarkets and gas stations. The initial roll-out will take place in New York City, followed by other major metropolitan areas later in 2012. If the test proves to be successful, nationwide roll-out will follow.
The smartphone has already begun replacing everyday items such as calculators, remotes, and in some cases, entire computers. Since it’s a device most people always carry with them, it makes logical sense that it will begin replacing your wallet contents.
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