Google might soon implement some major changes to its mobile payments service in order to better compete with Apple Pay.
Analysts from Piper Jaffray predict that Google will “meaningfully upgrade” Google Wallet at its annual I/O conference in June, which is where the company usually talks about the projects it will focus on through the rest of the year.
Here’s what the analysts, which include Gene Munster, who frequently makes predictions about Apple’s product line, Douglas J. Clinton, and Samuel J. Kemp, wrote in the report regarding Google’s strategy with Wallet.
While the prospect of actually making money via small transaction fees as a payments platform for Google is likely not that attractive a business, we believe the potential for Google to tie ads on its platform to a specific offline conversion would be significantly valuable.
That could be part of the reason banks have been slow to adopt Google Wallet, as analyst Tim Bajarin noted in a column published in PCMag. Here’s what Bajarin wrote after speaking with sources from major banks in September.
When Google approached the banks and asked them to support Google Wallet, it explained that part of their support meant that they would also feed data back to Google on what people bought and other personal data that Google could use to serve targeted ads. Besides privacy issues, the banks were not thrilled about being forced into a position to feed all types of shopping data back to Google just so Google could make money on ads. Consequently, most banks were not willing to play the middleman and in most cases would not fully support Google Wallet.
It’s unclear exactly what changes, if any, will come to Google Wallet in the next few months, but some have predicted that Apple Pay will help rejuvenate interest in NFC mobile payments in general. Samsung, for instance, is believed to be working on its own Apple Pay rival, too.
Google hasn’t shared any numbers regarding its own payment service, but download milestones The Guardian found in the Internet Archive show that Google Wallet passed one million installs in August 2012. That’s a little more than a year after the service launched in May 2011. Apple saw one million credit card activations on Apple Pay within its first three days of availability.
It’s not a direct comparison, but it provides some insight into how adoption differs between Google Wallet and Apple Pay. Google Wallet has been around since 2011, but the mobile payments service hasn’t really taken off. In its earnings call from this past October, Google’s chief business officer Omid Kordestani said the company is still trying to “get it right.”