Google Could “Wrapp” Up the Mobile Wallet Race for Good
Wall Street Daily readers know that point-of-sale Near-Field Communication (NFC) technology is one of my top trends to watch this year. And although a recent study by Pew Research found that the technology likely won’t be a dominant form of payment until at least 2020, that’s not stopping players from jockeying for position now.
After all, whoever lays claim to the biggest share of the NFC market should have an easier go of dominating the industry as the technology gains popularity down the road.
That’s why I originally pegged Google Wallet as the app to beat in the burgeoning mobile payment space. It benefited from a significant first-mover advantage by launching last summer.
Almost a year later, though, Google’s (Nasdaq: GOOG) still struggling to gain a foothold thanks to limited Android devices featuring the technology and only one official carrier partner, Sprint (NYSE: S).
The pressure is on now, too, with Verizon (NYSE: VZ), T-Mobile and AT&T (NYSE: T) gearing up to launch Isis this year. And as I said before, now that Isis already has all the major credit cards on board, along with major banks, payment terminal companies and smartphone makers, “Google has some catching up to do.”
And here’s a good place for it to start: Buy Wrapp.
A New Twist on Gift Cards
Stockholm, Sweden-based Wrapp is a gift card company unlike any other. It allows consumers to purchase gift cards for friends over Facebook. And better yet for the gift receiver, other Facebook friends can add to that amount with a few simple steps.
It’s not difficult to see how this idea could be popular.
There’s an unlimited balance on the gift card, so receivers can get massive amounts of dough depending on how generous their other Facebook friends are. Plus, the initial giver could receive a ton of gratitude even if he or she only spent a few bucks on the purchase.
Granted, the company only has 165,000 active users since it launched in September. But those users have already purchased 1.6 million gift cards. And now that the service launched in the United States over the weekend – with popular retailers like Gap (NYSE: GPS), H&M and Sephora on board – Wrapp activity should pick up considerably in the weeks and months ahead.
Something else that’s interesting about Wrapp is that it doesn’t just consider itself a gift card company, but also a contender in the daily deals space.
That’s because retail partners can offer free gift cards to get users in the store. But unlike Groupon, retailers don’t have to pay Wrapp until the gift card is redeemed, so businesses won’t have to take such a huge hit up front.
Avoiding another problem that businesses face with Groupon, stores can offer gift cards to a limited demographic, making it more likely that card users will be converted to return customers. Like CEO, Hjalmar Winbladh, told VentureBeat, “Wrapp helps retailers ‘avoid the bottom-feeders.’”
So why would this help Google stand out on the mobile payment front?
Simple, to develop a mobile wallet app that consumers want, it needs to replace the entire wallet. And if there’s one thing that’s no fun to carry around in your wallet, it’s gift cards. Since you never know when you’re going to get a chance to use them, they tend to accumulate.
That’s why, if you’re like me, you probably have a shoebox of unredeemed cards at home in order to prevent your wallet from giving you back problems like George Costanza’s.
Wrapp helps you avoid this, however, since the only way to redeem these gift cards in stores is through the mobile app. Some can be redeemed online, as well, but either way, there’s zero plastic to weigh you down.
So adding this feature to Google Wallet would give the application a huge edge, especially considering Wrapp’s unique twist on gift card exchange. Not to mention the fact that Isis doesn’t have a gift card solution at this time. All the more reason for Google to act fast.