June 1, 2015
Convenience seems to be one of the major pain points which most companies in the payments fraternity are addressing now. After Square and PayPal, even Google is focused on enabling hands-free payments. At its I/O event, the Internet search giant announced that it is testing a contemporary way to make payments (apart from Android Pay). From what it appears, customers download an app, and when checking out at a store, they don’t need even to take out the phone. All they have to do is stand in front of the cash register and say, I’d like to pay with Google. This solution is currently in the testing stage. Google is partnering with McDonald’s and Papa John's Pizza to launch the system. The service is initially being launched in San Francisco later this year and merchants interested can sign up for the beta.
Video of hands-free payments which looks like a facial recognition system mashed with some in-store analytics and geo-fencing:
Users are expected to make purchases at specific stores by standing in front of a compatible cash register and letting the cashier know that they want to pay with Google along with their names. A Bluetooth sensor will then detect the app on the user's phone—automatically billing them—and will send them a receipt of the transaction in the process.
As the service is still in the experimental stage, details with regard to security and privacy are still unclear. Google currently has not made it clear on how special scenarios would be addressed. Some of the common scenarios which require special attention are: having multiple users in the vicinity of a register with their Hands Free app turned on, people with same names in the store, etc. Furthermore, it is also unclear as to how validation would take place and how Google’s existing products such as Gmail, Google+ and Android Pay would aid in completing the transaction.
With the amount of information currently available in the public domain, people are speculating that the solution seems similar to that of pay with Square app—which has already been discontinued—or like PayPal Beacon, which also allows customers to pay for goods and services without taking out their phones or wallets. However from the video above, it seems like a facial recognition system mashed with some in-store analytics and geo-fencing.
The biggest challenge for Google will be to complete the loop. On one hand, Google has to gain the trust of customers (a problem already faced by Google as it was not very successful with Google Wallet). On the other hand, an even bigger problem for Google will be to get enough merchants to integrate the solution into their POS systems. With so much happening around the POS market (such as EMV migration, Apple Pay, Samsung Pay, PayPal integration), the merchants are indecisive. So getting merchants to accept hands-free payments seems like a distant dream.