An interesting new patent was published August 30 that would suggest that Google is developing a mobile phone payment system.
The Text Message Payment patent details a system where by Google offers a mobile focused payments under the title of GPay.
Examples of payment scenarios given in the patent include paying for goods from a vending machine, as well as purchasing items directly from offline retailers.
Whilst it’s certainly possible that the GPay Mobile payments system could well be platform independent, given the very strong indication that Google is preparing to launch a mobile phone, GPay could end up as an exclusive GPhone offering, one that gives Google the jump over other mobile operators by enabling mobile payments natively from the handset.
Mobile payment systems aren’t new; I can pay for parking locally via mobile phone now, however what Google is suggesting in the patent is something that is far broader, and perhaps more importantly independent of mobile phone carriers and their billing systems. Google competitor PayPal currently offers their own mobile payments system, but despite launching in March it hasn’t set the world on fire; Google on the other hand would have the advantage of embedding GPay in the GPhone.
Thanks to Patrick for the tip.
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So what is the answer to the headline? Or was it just to catch a few Diggs?
Im not sure what Google are “patenting” here. I thought SMS based payment systems have been around long before the 26 Feb ?
what’s the current killer iPhone app?
This type of Mobile Payment has already been in commercial production in the Philippines for a long time. Here are the services by the country’s two major mobile phone operators.
Smart SmartMoney
http://www.smart.com.ph/Corpor.....martMoney/
Globe’s G-Cash
http://www.myglobe.com.ph/gcash/
The filing date is Feb 2006. Therefore, both Smart and Globe services can be used as prior art. Since both of them have commercially launched their products before that time. In fact, Smart Money won something from the GSMA sometime back.
I wonder if you guys would ask the same questions if this review was done by Michael?
How come it seems like Duncan’s posts are only read by jerks?
About fucking time. Currently Obopay has been rapidly gaining market share.
Pretty funny that you have a PayPal story right after this…I can remember when this was PayPal’s primary business model. PayPal had an app that ran on Palm OS devices. It was used to “beam” money (via IR) to other Palms.
Example was, you go out to lunch with a buddy. You pay the tab and your buddy just beams you money from his Palm to yours. Then when you each go back to your computers, PayPal would sync to it’s servers, deduct money from his account and credit yours.
I couldn’t wait for the world to catch up to this idea. I want to walk into my local pizza shop and just by having my Palm Pilot (or now iPhone) on me, the Pizza shop would get my cash thru beaming (now Bluetooth).
Google is absolutely the last company I would give financial information to. I am not that big an idiot.
Commenter 4, thanks
Tcruncher2 (comment 2) From what I can make of it this isn’t SMS, it seems to be web over phone based with some sort of phone authentication..the pics of the interface would seem to indicate a Java app perhaps…
Duncan, the funny thing is…. #4 obviously read your post him/herself
Ouch, fast fingers…. apologies, I misread #4
Is this a credit based system ? Why would anyone pay cash instantly instead of taking credit and pay later ?
Maybe PayPal was a little ahead of its time but this sounds very similar to the original PayPal idea. I do not get the difference, even if it is through a web based service.
Software related patents need to go away.
This is pretty cool, but my general skepticism aside about the GPhone - even if the payment system were to be successful, I don’t think it could be a killer app for the GPhone. In order to get to the scale they’d need to convince all the vendors and vending machines to build out the backend necessary to accomodate this they’d need it running on every phone that could handle it, not just the GPhone.
Hey Duncan, enjoying your articles more and more.
I don’t think mobile payments will hit the mainstream anytime soon because the phone market is so diverse, and as simple as it sounds, it’s far easier to swipe a card than to text message a payment.
I’m in Japan so I don’t know exactly what is happening in the US, but it seems like it could well work with early adopters (provided that they haven’t splurged for an iPhone…)It appears most of the phones released here over the last 12 months(not bottom rung, but only a step or two up from basic) have FeliCa, which lets people buy from vending machines, get on trains, cinema tickets… focusing on young consumers(7-Eleven and other stores have it, decent restaurants dont) I also don’t know if you are using QR-codes or not, but to use MMS and a barcode or something… not as fast as a swipe of a card (or FeliCa phone), but a plausable half way thingermajig.
I suppose with smaller payments (beer, smokes, possibly petrol) it’s more popular.
Gosh I can’t wait for google to release a phone. If they don’t come out with something in the next few months, I will probably end up buying an IPhone.
Brian brings up a great point - this was almost the original business model of paypal - heck, they even transferred the funds for their first major round of VC from their VC’s PDA to their’s.
Google’s obviously doing something a bit different and has more wide ranging applications, but I think PayPal has a huge lead in terms of technology, fraud detection and years of time to really think deeply about some of the challenges that are inherent in a system like this.
And if Google marries itself to the GPhone, they’ll greatly limit their potential distribution - as opposed to PayPal who could cut sweetheart distribution deals with all of the major wireless providers.
what if Google buy Prosper.com and use this as a enabling platform for prosper ?
I am desperately seeking a patent attorney. I need to file a few trivial software patents for software programmed over the years.
Nonetheless I think it could be a good app for the GPhone.
Cute patent.
It’s a great idea, whose time will come. It would take someone like Google, or Apple, etc. to make it happen.
I’m ready, bring it on!
This is definitely a wild goose chase Duncan, with massive worldwide growth on prepaid, onboard credit really becomes an issue with mobile users.
The only issue it solves is the one with premium sms payments, the seller only gets 60% of what the buyer paid.
Still though the implementation of a scheme like this would take years and with credit and debit cards now moving to our mobile phones we will be covered on a payment method already.
Keep up the good work ,am definitely tuning in more
I really like these pictures. Comicstyle but clear. Funny to see that googles attitude is also alive in their patents.
Pile of kaka. I was Marketing Manager at a mobile payments (SMS & IVR) company that closed a few years back. The whole market never took off and we trialled with a local Credit Card company. The trial was an astonishing flop. Nobody used it, despite the marketing.
The key take aways are:
1) SMS is clunky. If you need a decent interface it’s going to have to be something on the front end with SMS as transport only.
2) IVR doesn’t work in noisy environments with music playing. It thinks you’re pressing keys when there is background music.
3) Mobile network coverage is really spotty. Stores often have their tills at the back where coverage is worst. 3G is even worse radio propagation and I don’t think every store is going to put in mobile pico cells.
4) Credit cards are easy and everyone understands the money flow and %.
5) If you’re doing rev share with both mobile operators & banks, you’ll never make a profit and your service will be more expensive for merchants than any other, so they will not have any incentive to use it.
In short - it’d be great if they can make a real go of this, globally, but the non-technology parts are the killers.
This looks like a joke. What, exactly, is even remotely patentable in the filing? Google has lost it.
And a link to the GPhone is just silly. For a scheme such as this to have even a remote chance of succeeding (it has been tried many times before), it has to work equally well on every phone out there.
“This looks like a joke. What, exactly, is even remotely patentable in the filing? Google has lost it.”
The fact that they’re doing it on a mobile platform, of course! That makes it a brand new idea and, uh… yeah.
Ok, it would be a good idea to read the patent application before bashing it. Going through the legalese just doesn’t fit my schedule today.
Could have some competition in the UK:
http://news.bbc.co.uk/go/rss/-.....764979.stm
I thought paypal already has a system like this.
Hey, this is a direct threat to operators’ cash cow in the form of premium SMS with ridiculous rev share.
Since this will be a java based application, I am sure Gpay will work with all Java enabled phones. I don’t think Google is stupid enough to offer only for Gphones. Good article Duncan, forget #4.
In the patent it says the following: http://tinyurl.com/34qr99
Communication interface 866 may provide for communications under various modes or protocols, such as GSM voice calls, SMS, EMS, or MMS messaging, CDMA, TDMA, PDC, WCDMA, CDMA2000, or GPRS, among others. Such communication may occur, for example, through radio-frequency transceiver 868. In addition, short-range communication may occur, such as using a Bluetooth, WiFi, or other such transceiver (not shown).
That shows Google have other phones in mind as well besides the GPhones.
iphoner: go to http://www.moko.mobi pretty cool social communications site.
It’s not new, which I’m glad to see you pointed out, Duncan - it’s been a thing people have talked about in the retail industry for a looong time, and it didn’t stick. But, I can see it starting with small, easy applications and possibly - big possibly - eventually migrating toward retailers. Applications are sexy and great, but only if users adapt, and I think the broad consumer market isn’t quite here yet.
It sure made for a lot of noise today. I just returned from being out of the country. I didn’t miss the daily overhype in the tech business at all
Can’t compete with our ZunePhone’s MSfree!
http://fakesteveballmer.blogspot.com
This idea has already been implemented, and is practiced by some Asian nations like Japan and the Philippines.
THIS IS NOT A NEW IDEA!
Bringing this kind of idea to North America I find exciting — Asian nations may have this, but finding this at my local 7-11 means my pockets got lighter.
@#4: The difference between Mike’s posts and Duncan’s posts is that Duncan doesn’t delete all the jerks in the comments like Mike does.
Duncan may not be all that good a writer, but at least he doesn’t filter out critical comments just to make himself look good.
not new… already have in philippines but doesn’t click.
PayPal’s mobile service has this market cornered. This Gproduct wont work.
Sorry, Google. Been there, done that…. PayPal Mobile.
jag är gay
thanks for coming out number 41
Looks like a joke to me or a crappy Business project I did back in IT school !!
I cant believe this is all around the web
kthxbai
I like turtles.
Look at the test dates. 2005.
It is only a patent application. If it is for real, it does not mean that Google have gone to market with gpay which appears to be someone else’s website.
Imagine using the GPhone with a mobile payment system to barter while shopping. For instance I am looking to buy a digital camera and I think the brick and mortar’s price is too expensive. While in the store I go online and find the same item cheaper and show it to the sales manager. Will the store be open to barter? What will the reaction be if I opt to make the online purchase right there if they do not come down on the price?
It would be an interesting situation……. will we see a technology driven return to bartering?
Visit http://www.mobilepointview.com where I cover the mobile payments segment, including GPay versus a slew of other offerings already entering the market.
I love that GPay could be a visa/mc/amex/disc/DC killer by offering merchants 0% interchange but there’s another component necessary: credit card banking. In addition, two other G apps don’t have traction: GPay and GPhone.
Critical statistic: over a quarter of charge transactions turns into a balance that isn’t paid at the end of the month. Most balances charge the consumer over 15% in interest.
I see this as a triangularity of non-traction. G credit card banking, GPay and GPhone just needs one of the three to not take root and the system just isn’t going to work. Now if they acquire BillMeLater, I’m buying G stock up to $560 (well at least 0.6 shares at ShareBuilder.com).
In response to Duncan and your #10 response, the patent clearly states:
“2. The method of claim 1, wherein the text message is in the form of an SMS message. ”
So yeah, it’s SMS based. Did you read the patent?
Nice comments here, but I have a question for you all. Does anybody have a guess as to ways that Google will be able to squeeze some money out of the Googlephone idea (assuming it’s true?). What about localized advertising?