Google may not be the first company you think of when it comes to the sea-change taking place in the payments, but it'd be a big mistake to overlook it. Google certainly has the technical know-how, and it has a massive user ecosystem.
But it may also have something even more important: A drive to "get it right" before they worry about cashing in on the business. And a highly-profitable leviathan like Google has the ability to take that path and stick to it.
In the video below from the Transact 14 conference, Jason Oxman, the CEO of the Electronic Transactions Association, explains why Google's commitment to "getting it right" is so exciting. He also notes that the approach that Google is taking is a broader shift in the industry that could create a much more engaging shopping experience for consumers.
A transcript follows the video.
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Matt Koppenheffer: One of the keynotes this morning, which I thought was just great, was from Ariel Barden, from Google; certainly one of the central players in the mobile payments revolution, you might say.
One of the things that really jumped out at me in his keynote was, he said that in terms of making money from this, they're not really worried about that at this point. They want to get it right for their partners, they want to get it right for their consumers.
From your position, you're optimistic on mobile payments. You're central in this whole mobile payments technology -- that's got to be so exciting, to hear a company like that say, "We just want to get this right."
Jason Oxman: It's very exciting, and what I think is interesting about Ariel's keynote this morning and Google's approach to payments is, it recognizes that payments is a part of a commercial transaction, and not the transaction itself.
I think for most of the history of the payments industry, the payment piece itself has been the most important thing that our industry has offered; the ability to process the transaction, to make the payment.
But what Ariel Barden talked about this morning, and what Google is implementing, is the idea that payments is a part of a broader relationship with the customer. Obviously, the payment is important because the merchant wants to get paid for the product or service that they're offering.
Koppenheffer: That doesn't hurt!
Oxman: But, combining that payment piece with more, with the kind of things we were talking about before -- the loyalty, the location-based offers, the coupons, the things that will maintain, cement, and solidify the relationship with the customer -- that becomes a more interesting transaction for the merchant.
And, it's less important to the provider of that transaction that the payment piece itself generate revenue, because from Google's perspective maybe it's something related to other services that Google offers along with the payment that make it a more valuable transaction for Google.
Koppenheffer: Bring them into that whole ecosystem.
Oxman: But the kernel of that, what drives it for the merchant, is that payments piece.
I think we're seeing that theme here at the Transact show, overall. As you walk the show floor, you'll no doubt see payment companies and technology companies partnering together to make that value proposition offer to merchants and to consumers, to drive this kind of adoption. So, it is a very exciting development.
Koppenheffer: It's actually interesting you point that out. We were just on the show floor, talking to some of the folks from Ingenico.
I think a lot of consumers may see the Ingenico swipe device when they're checking out, but what they were talking about is that whole solution system. You get the customer information up into the cloud, you get the ability for the merchant to be able to view all of that, to be able to act on all of that, create a richer experience for the customer.
Obviously, that's more of a value proposition for somebody like Ingenico to offer to a merchant.
Oxman: That's exactly right, and it also makes the merchant more of a long-lasting customer.
We're in the midst of an incredible technological revolution in payments right now, where those swipe terminals that you were talking about before -- for Ingenico or VeriFone, or any of the other companies that make them -- they used to be just a swipe terminal, just a means of reading the magnetic stripe on the plastic card.
But now, as you note, those terminals can do a lot more. They can accept PayPal, they can read electronic offers that have been transmitted to the customer, they can collect information about consumers.
There's a lot more that those terminals can do, and those terminals are more than just for processing the payment; they're the point of interface with the customer, so that's a great development too, for the equipment manufacturers in particular.