Will Google Leverage Android Rules To Revive Google Wallet?

Is Google tightening the screws on large Android OEMS that leverage the Android operating system to revive Google Wallet in the face of the new Apple Pay challenge? That may be why the search giant is introducing new requirements for Android certification. According to confidential documents examined by online news service The Information, Google has added new stipulations for Android devices from Samsung, HTC, Huawei and dozens of other manufacturers, requiring them to use Google services by default, including Google’s search engine and the Google Now voice assistant app.

The new specifications in Google’s “Mobile Application Distribution Agreements” also require that smartphones and tablets give prominent placement to as many as 20 Google apps, including those for the Google Play online store. That’s not quite as onerous as it sounds; 13 of the Google services are collected into a single icon that only takes up one spot on a phone or tablet’s splash screen.

But missing from the list of required Google services is Google Wallet, which Android users will still have to download separately if they want to use it, then add credit card details or other financial credentials separately from any information they already have stored in their Google Play accounts. Google Wallet reportedly has about 20 million users, compared with the 800 million accounts for Apple’s iTunes Store that are potential candidates to be converted to Apple Pay users.

Many Android licensees reportedly don’t like the tighter restrictions, but they reportedly believe they don’t have any leverage in negotiating with Google, whose mobile operating system now runs on almost 85 percent of smartphone being shipped worldwide, according to market researcher Strategy Analytics. With Apple controlling the second-largest chunk of the global market at just under 12 percent and the remaining fragments scattered among unsuccessful platforms such as Windows Phone, BlackBerry and Tizen, Google is in the driver’s seat.

Even Samsung, Google’s biggest Android licensee, has clashed regularly with Google over the smartphone vendor’s large amounts of customization. Samsung has frequently replaced Google apps and services with Samsung’s own offerings as the default.

Since the tighter Android requirements have surfaced, much of the speculation about them has concluded that Google wants a more consistent experience for Android users — and it wants that experience to involve more of Google’s own profitable advertising services.

However, Google has also used Android to push its less successful efforts — most notably in early 2012, when Google tied Gmail and Android logins to its Google+ social network, essentially requiring all Google users to sign up for Google+ accounts. Google finally eliminated that requirement this month.

Payments may be another unsuccessful area in which Google finds it worthwhile to leverage its successes, particularly Android. As Market Platform Dynamics CEO Karen Webster argued in a recent analysis, for Google to succeed in mobile payments, it needs both far more customer accounts and a much wider variety of opportunities for customers to spend money.

Closely tying Google’s services to every Android device, and then integrating Google Wallet for uses beyond the Google Play store, could increase the number of Google accounts. Changing customer payment behavior — which Google failed to do in 2011 when it originally launched Google Wallet for in-store payments at dozens of large retail chains — remains an unsolved problem.