Google’s Acquisition of Zetawire brings Electronic Wallets Nearer

Will Google be bringing us electronic wallets in the future?

If you look through your wallet, you’ll find a mix of objects such as credit cards, identification cards, and business cards. Google made an acquisition of Canadian startup Zetawire, in August, that makes an electronic version of a wallet a step closer.

Imagine visiting a museum for a day. You pull into a parking lot, and an alert on your phone tells you that information about the lot is available to you on your phone, including rates, hours of operation, and a map of the area. You park, and follow the directions on the map out to the museum.

Once inside, you stop off at the gift shop where you purchase a few postcards to send off to friends, using your phone to pay for the cards. Your phone logs into the museum system to access your donor membership before the payment is made, and your member discount is applied to the cost of the cards.

Stepping into the museum, another alert rings, and an offer to have a phone guided tour of the museum becomes available, showing you details about every exhibit as you approach them.

You take advantage of the tour, and when you’re finishing up, a kiosk offers paper pamphlets as well as the chance to sign up to receive information about future exhibitions. Interested in a future show, you wave your phone over the kiosk so that it can collect contact information from your ID card. Back at the parking lot, you wave your phone at the exit to pay for parking. A receipt is sent to your phone.

You stop off at a coffee shop on the way home, and wave your phone in front of the Google Places decal on the front door. The website for the coffeeshop comes up, along with an electronic coupon for a free pastry with your purchase of a coffee.

An electronic wallet can contain digital versions of objects such as:

  • Cash,
  • Credit cards,
  • Debit cards,
  • Gift cards,
  • Coupons,
  • Receipts,
  • Membership cards,
  • Business cards,
  • Identification cards,
  • Photographs,
  • Digital videos, music, etc.

Zetawire and Near Field Communication

Google’s 10-Q financial statement published on October 31, 2010 explicitly notes the aquisition of Slide, Inc. in August, AdMob, Inc., in May, and On2 Technologies in February. It also notes that Google “completed 37 other acquisitions” in the first nine months of 2010, but it doesn’t tell us anything about those companies. Information about 26 Google acquisitions from 2010 have been made public in one way or another. News about an Auqust acquisition of a mobile payments startup, Zetawire, Surfaced on the 451 blog yesterday.

One of the technologies that Zetawire has an expertise in is Near Field Communication, or NFC. Near field communications is being built into the “Recommended on Google” window stickers available to businesses listed in Google Places. If you place your NFC enabled phone within a few inches, information will be streamed to your phone.

Google has created a video on how the technology works with the Nexus S phone:

It’s easy to focus upon the near field communications aspect of what Zetawire brings in this acquisition, but a look at the USPTO provides a glimpse at a pending patent filed by Zetawire that describes a more fully defined look at ways that a phone can digitally replace a wallet, and goes beyond NFC and payment platforms to describe how information can be shared back and forth via a phone.

The patent filing is very detailed, and explores many different aspects of electronic payments by phone, and other ways that an electronic wallet system can be used:

Secured Electronic Transaction System
Invented by Philipp Frank Hermann Udo Hertel, Alexander Wolfgang Karl Kurt Hertel, John David Trevor Graham, Mark Braverman
Assigned to Zetawire Inc.
US Patent Application 20090288012
Published November 19, 2009
Filed: May 18, 2009

Abstract

A configuration (a system and/or a method) are disclosed that includes a unified and integrated configuration that is composed of a payment system, an advertising system, and an identity management system as well as their associated methods such that the unified system has all of the benefits of the individual systems as well as several additional synergistic benefits.

Also described are specific configurations (subsystems and/or methods) including the system’s access point architecture, a user interface that acts as a visual wallet simulator, a security architecture, coupon handling as well as the system’s structure and means for delivering them as targeted advertising, business card handling, membership card handling for the purposes of login management, receipt handling, and the editors and grammars provided for customizing the different types of objects in the system as well as the creation of new custom objects with custom behaviors.

The configurations are operable on-line as well as through physical presence transactions, e.g., mobile transaction through a mobile phone or dedicated device at a physical site for a transaction.

Combine the ability of an electronic wallet that allows for financial transactions and informational transactions with Google’s increasing focus on location-based services, and it seems that smart phones are increasingly the focus of a lot of attention from Google.

The patent filing provides a large number of examples of how a digital wallet can be used both by merchants and by consumers. It’s definitely worth spending some time with if you’re interested in how the online and offline world might start getting a lot more interactive in a manner that makes it easier to interact.http://www.seobythesea.com/2010/11/google-to-provide-better-accuracy-in-location-based-services/

We can’t tell how much of what is described in the patent will become part of what Google will offer us in the future, but Google Places has already started showing how NFC can be used with Google Places decals. It’s likely that NFC chips will be a standard offering in smart phones in the near future. As a business owner and a website owner, will you be ready?

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39 thoughts on “Google’s Acquisition of Zetawire brings Electronic Wallets Nearer”

  1. Hi Jeremy,

    There are an incredible amount of potential uses – it’s exciting to see these kinds of technologies moving forward.

    I would expect credit card companies to embrace an approach like this – it enables them to be involved in more transactions, if they do things right.

  2. The possibilities emerging from an electronic wallet are going to be endless.

    Many great applications and uses are going to be developed and a whole new market. I wonder how credit card companies are going to react?

  3. I just hate the idea that I will HAVE to have the electronic wallet charged up to be able to do anything. And forgetting it somewhere would be a real pain.

    But if this is the way we are going with paypal ‘bump’ transactions and credit card ‘tap’ micro transactions, it can’t be that far off!

  4. Bill, I think your point of “if they do the right things” is really important. I can see a lot of ways that credit card companies could screw this up. Definitely an exciting proposition here, but I think it will be wildly entertaining to watch how the Luddites react to this…I expect some significant fear of security from those who jumped on the online banking bandwagon late.

  5. it sounds good, but what if someone where to steal your phone?what then? as i see it, it’s not ok to have all the imp info stored in one place.

  6. This is really exciting technology but we have been promised things like this for years, hopefully with big players like Google getting involved it might happen

  7. What kind of timeframe would you estimate before widespread uptake of this or similar all-inclusive online commercial identity token systems?

  8. Mark said: “but what if someone where to steal your phone?”
    Well, is that an argument not to use the advantages of an electronic wallet? I think, having an electronic wallet in your phone, is in a way more secure than having a regular wallet, as you probably would have all your info safely backed up in the cloud, and a possibility to remotely clear all info in your wallet if it got stolen.

  9. I have always wondered why mobile phones don’t have the Mobile Speed Pass technology built in to them to be able to pay for things on the go just like gas. I cannot wait for this technology to surface. It will change the e-commerce landscape forever. Thanks for sharing your find, Bill.

    Thanks,
    -Nate

  10. The technology is exciting and I’ve heard good things about other systems in place around the world.

    No matter how much I want this to go global, my paranoia gets the better of me.
    I worry about security and unethical monitoring.

    The last thing I want is people finding out about my Mountain Dew addiction.

    As always, if anyone can do it right, it’s Google.

  11. I think the idea of electronic wallets is definitely exciting and I’m anxious to experience using this technology for myself. However, I’m a little worried it would be too easy for savvy thieves to steal this information.

    On another hand, I think using this technology with smart phones is a genius idea and would be pretty cool. I know I would be ready.

  12. Hi Nick,

    If this electronic wallet system is tied to your phone, chances are that you would make sure that your phone is charged to use it anyway.

    From what I’ve read, many smart phones within the next couple of years will have Near Field Communications (NFC) chips built into them – so chances are that features that take advantage of those chips will become rapidly more available.

  13. Hi Aden,

    It seems like there is a growing set of regulations tied to credit cards and electronic transfers like this, so hopefully those will guide what financial services companies do in terms of things like security and ease of use of systems like this.

    With any system, there are people who are early adopters, people who wait for technology to mature a little, and people who are hesitant to jump in.

  14. Hi Mark,

    People do tend to be more trusting of keeping important information on their desktop computers than on mobile devices. I’d expect that there will likely be some security safeguards set into place to help keep using systems like this from becoming too much of a risk. Consider this though, when you carry around your wallet, it often contains things like your driver’s licence, possibly your social security card, credit and debit cards, and other information that it would be painful to lose. There’s a risk in carrying that information around as well.

  15. Hi Ben,

    Some similar technology has been in use for a while, such as EZPass technology and Gas station pumps that let you wave your card over them.

    It may take a Google to start seeing the technology more wide spread, and used in more types of activities.

  16. Hi Matthew,

    It’s hard to pinpoint a specific timeframe, though one of the drivers of a system like this is the availability of technology that can make it useful. Chances are good that many, if not all, smartphones released over the next couple of years will have NFC chips installed in them by default, which would maked a good number of applications using a system like this more feasible.

  17. Hi Viktor,

    Those are good points – if your wallet gets stolen, it might be a lot more work to report stolen credit cards, etc., than it would if you were using an electronic wallet. It might also be possible to have a kill switch installed on your phone, so that it stops working correctly once you report it stolen.

  18. Hi Nathan,

    I’ve never really needed a speed pass based upon my driving habits and commute, but I think it’s great technology. I would expect it to be something to be built into phones at some point in the future.

  19. Hi Ray,

    If you have a supermarket club card, they know about the Mountain Dew. :)

    I don’t think it’s any coincidence that the first word in the title of the patent I’ve written about above is “Secured.” That’s definitely one of the most important elements involved – though it likely refers to keeping your information secure from people other than those administrating a system like this. A lot of our security when it comes to credit cards and other financial transactions involves them being isolated systems – putting all that data together in the same place may be a cause for concern – even though it might come with a great amount of convenience as well.

  20. Hi John,

    I was talking with a local merchant about this earlier this morning, and he suggested a scenerio sometime in the not too distant future:

    “You want to pay with money? OK, let’s see if we can remember how to do that again.”

  21. Hi Mike,

    I’m afraid that you might be right. :(

    The great thing about the Zetawire patent is that it describes a very detailed and flexible system for merchants and electronic wallet users to interact with each other in a meaningful way. The Zetawire patent filing also provides a lot of flexibility in how merchants might be able to configure what happens when someone accesses one of their datapoints. The following section of the patent application has some nice illustrations:

    [0112]The transaction authority 102 similarly provides programs and other facilities for defining, controlling, and managing the aforementioned access points. This is once again done by providing the access point owner with an editor in the form of a standalone program or program embedded in a web page containing a formal grammar which can be implemented as a programming or scripting language. This grammar is used by the access point owner to precisely specify the behavior of the access point, and once again a user-friendly front-end is provided within the editor so that people who are not comfortable with programming can nevertheless use the system without any problems.

    [0113]By way of example, the editor can be used to define the location of a real-world advertising access point which is centered on a physical sign several feet away from a store’s entrance and set it to dispense a certain type of coupon before noon, and a different type of coupon for the rest of the day. Similarly, the system can be used to define the location of a real-world access point centered on a billboard advertising the services of a real estate agent that spawns a business card dispenser which is set to dispense that agent’s business cards. These management programs are not necessarily mutually exclusive, and can all be subprograms in a larger management program. For example, a store owner can use the same program to define the location and behavior of a coupon dispenser on the store’s web page, the location and behavior of a coupon dispenser spawned by the cash register, the location and behavior of a coupon dispenser spawned by an access point in the plaza in front of the shop, as well as a business card dispenser online, and another one at the cash register. These are examples given only to illustrate the nature and flexibility of the editors and grammars provided by the system, and should not be construed as limiting.

    [0114]In addition to letting the user interact with businesses and other institutions through access points both online and in the real world, the system also allows users to interact with each other. Users are able to use it to build a social network by creating contacts with other users, and even with businesses. Users can also import contacts from address books and other social networks. Users can then use the electronic wallet 7 to transfer money, gift cards, business cards, etc. with their contacts who also have accounts with the transaction authority, provided that the object is transferable and/or shareable. The system maintains a record of the chain of custody for each object in the system. For example, it can track each individual coupon to see where it originated, who shared it with whom, where it was spent, etc. This tracking ability is very useful for marketing and profiling purposes, allowing the system to bill advertisers only for advertisements that led to sales. Once again, this example should not be construed as limiting.

    While the system described in the patent filing anticipates the possibility of making coupons available directly on a merchant’s website, it’s probably much more likely that Google would limit a system like this to go to a place page, and to use Google’s coupon system.

    Hopefully Google won’t limit this system so that it only accesses place pages. It’s much stronger system, and more useful, if a business owner can define a wider range of choices, such as the museum tour or the interior garage map that I described in my opening scenerio.

  22. As I read your imagined future, it all seemed very real until I cam upon the snippet:
    You stop off at a coffee shop on the way home, and wave your phone in front of the Google Places decal on the front door. The website for the coffeeshop comes up, along with an electronic coupon for a free pastry with your purchase of a coffee.

    Google will NOT be taking the user to the website for the coffee shop they will be taking you directly to Google Places. :)

  23. This is definitely another up in technology nowadays but they would really have to do it right. Like other things, it has it’s pros and cons. I just hope that the pros would outweigh the cons.

  24. Interesting article, reminds me of Minority Report. Although I think guided tours by mobile phone might be a little hallow. I think I would miss the interaction with a human guide; questions and answers etc. There are a mind boggling amount of apps for this technology – I am going to spend Christmas trying to think up of one or two.

  25. If they could do execute this right, it could be huge, it’s uses are endless really. Technology is forever changing, full of excitement, can’t wait to see what they drum up next.

  26. Hi Andrew,

    I think there’s a lot of potential in the framework for this process as described in the patent. Chances are good that Google would tailor this approach to work well with the existing systems that they have in place, but I could see them implementing a lot of these processes.

  27. Hi Des,

    One of the most interesting aspects of the movie Minority Report was the vision of the future that it portrayed, from the Pre-Crime task force, to the use of personal data for advertising. The patent comes off a little less scary than some others that I’ve read in the past that discuss targeted marketing, and the sharing of information across many different companies to create detailed profiles of their likes, dislikes, and behaviors.

    I’d actually love a multimedia type computerized tour guide. Too many of my most recent visits to museums have been “self-guided” tours, and I know I’m missing out on an experience that would be richer if there were informed and articulate people guiding that experience.

    I’d love to hear of any apps you find that you think are worth sharing. Thanks.

  28. Hi Nick,

    This does have the potential to touch upon a very wide variety of interactions involving transactions and advertising in our lives. We live in interesting times.

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  30. While the idea of being connected to everything on your phone sounds glamorous, I honestly think there is an element of creepy in there. I sometimes think our society is already getting too heavily connected, especially with things we share online. Not only are there significant privacy issues but I worry about the financial burden and troubleshooting for this gadget, especially for those who seem to drop or loose phones frequently. I love some of what tech has brought us in terms of convenience and speed of information, but I have noticed that new technology has forced us to integrate with it and interact with it in more places, but not necessarily creating more ‘free’ time for us to actually have real human interaction – face to face conversations (we’ve all noticed people’s (or had our own) heads buried in little phone screens while having lunch, dinner or a drink). I probably sound like an old fogey, since younger generations that have always known this sort of mobile information integration will be much more comfortable with it—or at least engage it at whatever level they prefer.

  31. The great thing is that you could block an electronic wallet including all it’s contents if stolen

  32. Hi Ramsay,

    I’ve had some considerable concerns about how connected I’ve wanted to be in the past, and those still linger.

    Advances in technology have shaped in changed the way we live, the way we work, and how we think in the past. The telegraph, telephone, radio, television, and the internet have shaped society, and brought about many changes to our culture, and the connectiveness that the mobile web brings to us will likely transform us as well.

    I think there are plenty of areas that we have to consider treading carefully in as we move towards this future, and our ideas of privacy are likely to change as well. I know that many of our concepts of what “public information” have been changing as information that has been public, but not very accessible becomes moreso, like deeds for homes, court case and criminal history information, judgments for legal cases, and more.

    Interactions with others, and how we think about things like friendships on social networks, with people we may never meet face-to-face, are changing things as well. We live in interesting times.

  33. Hi Evan,

    Good point. And you could probably do that much easier than if you lose you actual wallet, and had to go about doing things like canceling credit cards.

  34. I am fascinated by, but ignorant on the topic.

    Why does the phone have to be involved throught the entire transaction at check-out? It would seem to me to be easier, with less parties involved, to have the phone simply be responsible for “introducing” the consumer’s bar code to the bar code reader at the grocery store, for example. Once the store recognizes the consumer, it’s computers could communicate directly (not over the phone line) with the mobile payments provider’s computers to complete the transaction.

    Would really appreciate it if someone would help me understand why this does not make sense. Clearly, this is not the direction the technology is heading in.

  35. Hi Jack,

    Enabling a phone to be involved in the whole communication means is less likely that you have to rely upon third party systems. The Zetawire business model, as described in the patent filing, is one which involves a two-way interaction involving a phone, not only for payments, but for other exchanges of information as well, such as customer loyalty cards, coupons, information sharing (like waving your phone in front of a Google Places decal and getting information about the store itself).

    You want a phone to be able to read information, whether a barcode or via near field communication, so that it can pull up information from those sources as it comes upon them. You also want a phone to be able to send information, to do things like exchange contact information with another phone user. An electronic wallet is potentially userful for more things than just making payments.

  36. I am surprised that Google hasn’t moved faster at being involved in moving money around. There is a lot of money to be made (even enough that Google would notice it). I am amazed they haven’t done better with Google checkout. I still believe this whole area of electronic moving of money is one that is well suited for Google to do well in. Cell phones seem a likely nexus of much of the effort and Google has been putting a great deal of effort into them – which will likely help these efforts.

  37. Hi John,

    There seems to be so much going on at Google regarding mobile phones that I have to give credit to whoever might be coordinating their efforts. I think it will make a difference when it comes to electronic transfers regarding money.

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