Google Wallet musings
By Charlene Li
I’ve been asked for the past couple of days what a Google Wallet would mean (regardless of the fact that it hasn’t been announced!). PayPal dominates person-to-person payments today. So if I need to pay my brother back for a scanner he bought for me, or pay for an auction (on eBay, of course!) I’ll use PayPal. It doesn’t make sense for Google to only challenge eBay/PayPal in this area – even though it will bring in close to $1 billion in revenue for eBay this year.
Instead, I think (and hope) that Google is thinking much, much bigger.
I was at the Supernova conference yesterday and ran into transplanted Bostonite Scott Kirsner – we had a good discussion about how all of the new blog publishers would get paid for their good work. One of the ideas we tossed around was Google Wallet – AdSense already puts paid links on thousands of content sites, so why not also enable them for micropayments? Google is already very good at tracking and collecting clicks worth five cents each. Google could also offer be a subscription “pass” that securely grants users access to premium content on multiple sites, with each site getting a share of the payment based on usage.
And here’s another way that Google could leverage a payment system. Google is one of the largest backers of the new Atom standard, which helps syndicate content. Today, most of the content that’s distributed via RSS is news headlines, but I’m a strong believe that commerce-oriented content will be appearing soon. So what if Google were to come out with it’s specialized aggregators or Web sites that would use the open standard to receive items and information?
Here’s an example. Today, if you want to sell a song on iTunes, you have to cut a deal with Apple – painful, long, and not economically feasible for individuals. But what if I were to put together a mix of children’s songs (via Creative Commons) featuring my kids’? I could stream it out as an Atom feed, include payment information in it for Google Wallet, and have it aggregated on Google Music. Voila – we just created an open marketplace for music. Repeat the same recipe for video, ebooks, and yes, even technology research reports.
Sure, Google could launch each of these services using traditional payment methods – but that’s just not the Google way, nor is it ideal for consumers. Each of these payments are potentially very, very small – and having a centralized payment system will help consolidate all of those micropayments.