The short odds have it that Google is developing a mobile payment and advertising service as early as this year.
Google CEO Eric Shcmidt has been quoted as saying that a mobile payment system could ultimately replace credit cards. And as Google recently bought mobile payment company Zetawire, it certainly looks like it’s heading in this direction.
If Google’s behind it, then it’s to be expected that the mobile payment system will be developed for Android-based mobile devices. But the search company isn’t the only one working on turning smartphones into mobile wallets. PayPal is reportedly also looking to develop a mobile payment system, using the same near field communications as Google.
Apple is also showing signs that it wants the iPhone to function as a mobile wallet. It has recently appointed a new leader for its mobile commerce group and has applied for an iPhone payment patent.
While speculation is mounting that 2011 will be the year of mobile payments, there are still many hurdles to be overcomes. At a time when smartphone security and viruses are becoming more of an issue, protecting sensitive financial details will be a top priority to the success of the system. Will users risk exposing financial information just to buy a bus ticket? To succeed, the system would need to be useable for many purchases.
There are also compatibility issues with different mobile operating systems between say Android and iOS. Not to mention the tricky legal provisions as well as financial and credit security that would need to be addressed before the banks get on board. But then if Google and Apple want to make it happen, it just might succeed.