Alphabet Inc. GOOGL announced that its Google division has developed a way that allows users to send money to friends, family and other acquaintances in their contact list by simply using a phone number. The announcement was made through a Google Commerce blog.
Users can now use Wallet to send money through a text message to anyone in their contact list. The necessary support for the new person-to-person payment method will be available following an update to the Google Wallet app for Android and iOS. Google will roll out the update to both iOS and Android in the next few days, but only in the U.S. for the time being.
How will it work?
Following the update, whenever a user sends money to a phone number, the receiver will get a text message containing a secure link. The recipient can simply feed in their debit card details to claim the money and it will be in their bank account in a few minutes.
Previously, a person’s email address was needed to make a transfer. But now the recipient does not need to have the Google Wallet app to receive the cash.
Conclusion
The increasing adoption of smartphones, tablets and other mobile Internet devices has become the biggest growth driver of online payment services. Consumers now prefer the convenience of ordering and paying online over the hassles of shopping at brick-and-mortar stores. As more customers now prefer online shopping, the use of online payment services has increased.
Google had launched its Wallet app in Sep 2011 and was a pioneer in mobile payments. It enables in-app purchase and mobile payments in addition to POS purchases and money transfer. Other than credit and debit card information, users can store loyalty cards, discount coupons and offers that they can apply during purchase. Google pushed its adoption by making it compulsory for Android development partners.
However, Google Wallet did not see much success. A limited network of compatible devices and wireless carriers wanting to work with the service resulted in its collapse. In order to revamp it, Google purchased much of another failed mobile payment service called Softcard and used its technology in combination with its own to create Android Pay.
However, Google never gave up on the Wallet application. It has been adding new and improved features to boost its digital wallet application. The latest move is a part of these efforts.
Google has a Zacks Rank #3 (Hold). Better-ranked stocks include NVIDIA Corporation NVDA, Stamps.com Inc. STMP and Texas Instruments TXN, all sporting a Zacks Rank #1(Strong Buy).
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