Google May Share Revenue with Carriers to Improve Wallet Adoption

Google (News - Alert) entered the mobile payments business last September with its Google Wallet offering. But due to tremendous competition, the search engine giant has been struggling to gain transaction for its NFC-enabled mobile wallet product ever since it entered the fray.

Other issues contributing to slow growth of Wallet include security concerns, minimal consumer use and few carrier and retail partners. Few initial partners include Citibank, Mastercard and Sprint (News - Alert).

Reports indicate the company is now pursuing a new strategy. According to a report in Forbes magazine, Google is considering sharing revenue with carriers like Verizon and AT&T in order to get them to adopt its technology. Google hopes their new strategy will improve its market share in this space. Key competitors in this sector include eBay‘s Paypal, Square, carrier-backed ISIS, and to some extent Apple.  

As per this report, Google is not aiming to generate any significant revenue through the transaction fees on Google Wallet. The company does hopes to improve its mobile advertising sales though, by targeting shoppers with coupons and promotions through the use of data, stats and trends gathered from the Google Wallet usage.

The company expects this new partnership will help them grow more quickly. And that the new strategy will prove to be a wise move on its part. Besides wooing bigger carriers like AT&T (News - Alert) and Verizon, the firm is also gaining support from retailers like Pinkberry frozen-yogurt chain, Macy's department stores, Subway food chains and American Eagle, reported CNET.

Based on market data, the Forbes report shows the global mobile advertising market is expected to be worth $11 billion in 2016, up from $2.6 billion this year. The report stated that mobile advertising is one of Google’s most important businesses, and accounts for nearly one-third of its overall value.