It seems Google might be considering moving beyond NFC in its quest to compete with Apple Pay, according to new data published in The Information. The search-giant has reportedly been quietly testing a contextually-aware mobile, bluetooth-based payment system codenamed “Plaso” both in-house and with some select retailers like Papa John’s and Panera Bread.
So how does Google’s new “contextually aware” payments system work? Details are sparse, but it seems that the basic idea is to allow a customer to either select an object in store (or potentially pre-select an item online in advance of arrival) and present themselves to the cashier with their purchase and initials.
The cashier locates said initials from a list of Plaso-enabled devices within Bluetooth range of the retail clerk’s device, which ensures the customer is actually present in the store. Instead of pitching toward NFC, it seems Google Wallet 2.0 is investing its faith in Bluetooth and its potential to be a mobile proximity identifier.
Some details remain sketchy, namely how exactly the clerk bills the consumer. The TI report does not explain how exactly Plaso payments are processed, though sources said to be knowledgeable on the matter have affirmed that only a smartphone is necessary to conduct transactions.
One possible answer is that this new system will allow the initial transaction to go through Google, with the vendor’s payment processor completing the business end of the deal.
Analysts have questioned the strong passing resemblance Plaso bears to the now defunct Square Wallet. Square pulled the product during the summer of 2014 because it failed to really capture consumers.
"Square Wallet provided a very magical experience but didn’t have a lot of the utility value,” Square’s Ajit Varma said in an interview with ReCode at the time.
Finally, it is not clear from the report if Google will be offering the Plaso service in place of the NFC-based Google Wallet, or as an addition to it. Google has struggled with the NFC-backed wallet through various iterations and has failed to capture significant consumer or merchant interest thus far. Though the service has seen some recent gains, those gains seem to be unfortunately linked to the rising popularity of of Google’s direct competitor in the mobile wallet space – the also NFC-backed Apple Pay.
However, even Apple Pay has struggled with merchant acceptance since launch, leaving some analysts speculating that this new potential move by Google is an attempt to grab some retailer enthusiasm (and perhaps some of Apple’s considerable momentum) with an easier to implement tech.