Google (NASDAQ:GOOG) jumped into the mobile payments space last year with its Google Wallet offering. However, its NFC-enabled mobile wallet product has failed to gain much traction due to tremendous competition in the space. Reports suggests that Google is considering sharing revenue with carriers like Verizon (NYSE:VZ) and AT&T (NYSE:T) in order to get them to adopt its technology and boost market share in the mobile payments market.  Google competes primarily with eBay‘s (NASDAQ:EBAY) Paypal, Square, carrier-backed ISIS, and to some extent Apple (NASDAQ:AAPL) in the mobile payments market.
Google Wallet to Help Google’s Mobile Advertising Business
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Google doesn’t aim to generate any significant revenue through the transaction fees on Google Wallet. Instead, it hopes to improve its mobile advertising offering by targeting shoppers better with coupons and promotions through the use of data, stats and trends gleaned from the Google Wallet usage.
To do that, it needs massive scale. Given how slowly it has grown over the past few months while its competitors have leaped ahead, using revenue sharing partnerships to boost market share may be a wise move on its part. The global mobile advertising market is expected to be worth $11 billion in 2016, up from around $2.6 billion this year.
Mobile advertising is one of Google’s most important businesses, and accounts for nearly one-third of its overall value. We currently have a $627 Trefis price estimate for Google, which stands nearly 2% below its market price.Notes: