Square, the Google Wallet exodus and NFC

Square's Jack Dorsey at GigaOM RoadMap

Square's Jack Dorsey at GigaOM RoadMapEarlier this morning news broke that Rob von Behren, co-founding engineer of Google Wallet was leaving the web giant and was joining Square, the San Francisco-payment company co-founded by by Jack Dorsey. Already many are wondering if Square is going to support near-field communications (NFC) in the near future?

The right question is — what is going on at Google Wallet? Earlier in the year, Jonathan Wall, another Google Wallet co-founder and his colleague Marc Freed-Finnegan left Google to start Tappmo, a startup focusing on mobile commerce. That senior guys like Wall and von Behren are quitting shows that something seriously has gone awry at Google Wallet, something the NFC Times outlines in great detail on their blog post.

As for Square, the company is pretty clear about its attitude towards NFC. Square COO Keith Rabois has been pretty blunt about why he (and Square) find NFC of little value. At our Mobilize conference in September 2011, Rabois remarked: “I’ve never met a single merchant in the U.S. who says I want this NFC thing.” The harsh assessment of NFC came six months after Rabois in an interview remarked: “We are waiting for folks to come up with compelling NFC apps. And if NFC does become popular, we can bake it into our product as well.”

With one in five smartphones likely to support NFC by 2014, many large companies however are signing up for NFC. However, in the real world, NFC-based payments are still a rarity despite Google’s big marketing push. In one of his many posts on the mobile payments industry, my colleague Ryan Kim argued that NFC will driven by marketing and loyalty and not payments.

Going back to Google Wallet, the search and mobile giant needs to quickly figure out how it is going to gain traction in a business that is attracting all sorts of competitors — from PayPal to phone companies to Square and even Google’s former employees.

Update: Google says it has acquired New York-based TxVia, a payments company.

we’re thrilled to announce that we’ve acquired payments technology company TxVia to complement our payments capabilities and accelerate innovation towards our full Google Wallet vision. TxVia is a technology pioneer that offers a fast, flexible and highly reliable payments platform—which we believe is one of the best in the world.

Since 2008, TxVia has supported the management of more than 100 million accounts. They’ve partnered with the industry’s best known brands, and their leadership team has played an instrumental role in defining the fast-growing prepaid card segment of emerging payments. In this time, TxVia has also certified and directly connected to the major payment networks, which establishes a solid foundation for Google Wallet and our partners to drive innovation on a global scale and in a partner friendly way.

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