December 14, 2010

Need more proof Google wants in on the mobile payments game?

The search giant last week announced that its next version of Android OS - 2.3, or, Gingerbread, if you're into wintry sweets - has Near Field Communications support built in. And today several Android and tech blogs are reporting that Google has also recently acquired an early-stage mobile payments startup called Zetawire.

As tech and social media-centric blog Mashable reports, the acquisition happened quietly last summer:

Interestingly, this deal wasn't closed in the recent past; the acquisition was concluded back in August, around the time Google also bought up social apps startup Slide (which was led by a Paypal co-founder) and social currency company Jambool.

The December buzz comes apparently after a 451 Group analyst reported that Zetawire "had been granted a patent for 'mobile banking, advertising, identity management, credit card and mobile coupon transaction processing,'" Mashable writes.

So putting it all together, not only does Google anticipate NFC to become a big technology as it showcased in the new Samsung Nexus S running Android 2.3. But it also sees the potential for NFC to become a vehicle for future payments. And, with the Google-centric ecosystem Android promotes, those payments could be processed through Google's own Google Checkout payment processing service.

So is all this a threat to banks? Probably not, as Google's current payment services still tie to a credit or debit card customers have with their existing financial institute. One way or another, the customer is still storing their money with a bank.

But as more users automate the process and adopt NFC payments through their phone using Android's built-in payment capabilities and Google's own payment processor, the idea of a "mobile wallet" becomes a branded experience. And the bank account itself turns into something more like a utility running in the background; the customer doesn't see it, they don't think about it, and, pretty soon, it's in the background powering payments like the electric company powers a light bulb.

At that point, people might be paying with — and storing their personal information in — a "Google Wallet."