Google Wallet is the search engine’s ambitious play to push mobile payments into the mainstream. When the service goes live in New York and San Francisco this summer, users will download the Google Wallet application from the Android Market and provision either a Citi MasterCard or Google prepaid card to work with the app and the NFC (near-field communications) chip on their phone. Shoppers may then just tap to pay for goods on NFC-supporting point-of-sale terminals in more than 311,000 retail stores worldwide that offer MasterCard’s PayPass service. Wallet needs a raison d’etre or else it’s just another niche, erstwhile payment play.
To wit, Wallet is being offered in conjunction with Google Offers, a new local deals service the company is using to entice consumers to buy into discounts and use Wallet to pay for goods. That’s the interesting hook here. As much as mobile payments are unproven and perhaps untested in the world of commerce, local deals have been a boon for companies such as Groupon and LivingSocial. That’s why Google, Facebook and others are all looking to copy those local commerce templates to find success. But Wallet feels like another beta platform for Google—well-intentioned but unfinished and raw. Here are 10 challenges—from security concerns to consumer apathy and entrenched competition—that Wallet faces as it moves toward a gradual rollout in the United States and abroad.