In the last couple of years, tech companies such as Alphabet Inc (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Samsung Electronics Co Ltd (KRX:005930) have allowed us to pay for our purchases with the tap of our phone. But if a test-pilot program turns out to be successful, it could be big for GOOG stock. You see, Alphabet, formerly called Google, is trying to simplify the way we pay for things and thinks it can streamline that process—using our faces.
Imagine a future in which you don’t have to reach into your pocket to pull out your phone or wallet or “pick up a hot dog at the ballpark without fumbling to pass coins or your credit card to the cashier.” (Source: “Testing, Testing – One, Two, Hands Free,” Google Commerce blog, March 2, 2016.) Apparently, Google thinks that’s what we all want.
Last week, Google stock announced that it is launching a pilot of its “Hands Free” payment system in the South Bay area of San Francisco. Users can download the Hands Free “Android” or “iOS” app and add their name, initials, a picture of themselves, and a payment method.
Once the app is installed, Hands Free uses Bluetooth, Wi-Fi, and location services to detect if you are in a participating store. When you get to the cash register, all you have to say is “I’ll pay with Google.” The cashier will ask for your initial and use the picture you provided on your Hands Free profile to confirm your identity.
But wait. Google thinks it can make this process even faster, too. At select stores, Google is experimenting with visual identification, so you won’t even have to open your mouth. An in-store camera will capture your image so that when you checkout, your picture automatically comes up and payment is confirmed.
So why is Google doing this? The mobile payments market is set to explode and Google wants to be a big part of that. Since Google rolled out “Android Pay” last September, the company has averaged 1.5 million new registrations each month in the U.S. There are also about two million locations that accept the payment method. (Source: Ibid.)
Additionally, the mobile payments market is expected to more than triple in 2016, from $8.71 billion to $27.05 billion worth of transactions. (Source: “How mobile payments will grow in 2016,” Fortune, October 29, 2015.)
With that kind of growth, it’s important for Google to get its brand onto as many phones as possible, and they are hoping to do that by creating an even more convenient way to pay.
Hands Free is an interesting experiment and if it manages to gain traction, expect Google stock to run higher.