Saturday, November 26, 2011

Square vs Google Wallet

Somehow I have suddenly become a big fan of mobile payments especially because of the cool quotient of how they are being implemented.

I like Square coz they are the best example of being innovative and disruptive at the same time. They identified a problem, ie the inability of smaller businesses to accept credit card payments and came up with a mobile phone based credit card reader, which is cheaper, more handy and easy to use; a solution no one else could even imagine. Once they disrupted the payment segment, they slowly started getting into Point of Sale applications and made them tablet based. The next obvious step was to get onto the customer's phone who pays the bill. Once paid The Square card case app allows customers to pay any Square merchants hands free.

I like Google wallet for being the fun way to pay as they dont really solve any major problem. They are just making it easier to make payments and eliminating the need to carry wallets.

I'm now inclined to compare both the services as they both are trying to revolutionize payments using mobile phones.

1. Square enables small merchants to accept real world payments using mobile phones and not having to go for a more expensive conventional Point of sale systems and credit card readers. It also allows customers to pay using mobile phones.

Google wallet enables customers to make payments using their mobile phones at any merchant who uses the conventional Point of Sale systems. It also allows users to make online purchases (Google checkout is merged with Google wallet now).

2. The Square card case app allows customers to use them only at Square merchants.

Google wallet allows user to pay at any merchant who uses a Pay Pass credit card reader, who is more common.

3. Square applications can be used on any iPhone and Android devices with an internet connection.

Google wallet is currently only available on Android and also on devices with an NFC chip.

4. Square lets merchants to know about their regular customers being present even before they come for paying so that they can given them personalized offers while in the store.

Google wallet only gives the information of the user to the merchant while paying but it can capture and save (google) offers online, even while outside the store.

5. Square applications and the way they work is more cooler than Google wallet. Square allows users to explore stores and pay hands free. Whereas Google wallet looks more like a practical solution.

Is there a winner yet? I dont think so. Both are working to solve different problems and they will definitely get better at it. Square has taken off really well in the US as a credit card reader for smaller businesses but Google wallet is still in its nascant stages as there is a big technology adoption barrier for its usage; NFC.

Updated on Dec 1st

But according to me who will win?

I think Google will win provided more NFC based devices come out. Here are the reasons.

1. Google has a bigger foot print than Square. Google can be quicker in getting their integrations done in countries like India.

2. Even though Square is indeed a better solution for small merchants the customer solution is too cool and dependent on internet for users outside US/UK/Australia to use it.

3. Can my NFC Android phone with Google wallet use the new Beam feature to act as a Pay Pass like thing? ie accept payments by tapping a credit card onto the phone?. That will make a killer feature.

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