Just in 2010, Juniper Research, a company that provides analysis of the mobile and wireless sector, predicted that half of the mobile phone users worldwide would be making mobile payment by 2014.
In March this year, Consumer Research section of Federal Reserve published their report revealing that only 22% of all smartphone users have used mobile payment in last 12 month.
Despite the buzz of Google Wallet, Square, Apple pay and the like, the mobile users are reluctant to adopt mobile payment; but why? When Federal Reserve posed the similar question in their 2013’s survey, 38% of respondents shown security concern.
For a technology to go mainstream, its adopters have to place their trust in the technology. And Google is moving the needle in that direction, hints one of their patents.
The patented technology, that of course is a feature of Google Wallet, makes mobile payments possible in offline mode. Thus, you don’t have to be connected to the internet every time you shop.
And to make the transactions safer, Google will add some criteria like an expiry date for offline fund, maximum fund available, and then some more that we have discussed below in details.
How Offline Payment in Google Wallet Works
Succinctly put, let say you come for the grocery shopping and piled up the cart with everything needed to survive for next few days. After you are done, you come to the point of sale terminal to pay the bill.
There you noticed that you have already running out of the internet data. But, your Google Wallet supports offline payment. So, no need to sweat buddy.
You get connected to the merchant payment system through Bluetooth or any other NFC means.
On your desire to make an offline payment, the merchant payment system sends a payment request on your phone and verifies some criteria (explained below) and proceed for the payments in the offline mode.
And whenever, after the payment, you get connected to the internet your fund will be updated.
This was a general overview. To give you more insights of how offline payment in Google Wallet works, I’ve tried to provide below a detailed explanation. Here we go –
To make it easy to grasp, I’ve divided the whole process into 3 steps:
- Pre-Payment – involves setting up funds for offline payment
- Making the Payment – Process in offline mode
- Post-Payment – Involve Updating the accounts
First of all, you will define the amount of funds you want to make available for offline payments like, $300. Limiting fund for offline payment solves two problems; first, it avoids any duplicate transaction and second, it locks rest of the money and prevents unplanned spending.
After you set the amount for offline payment, the Google Wallet will download a balance sheet of the fund made available and other details like your withdrawal history. The pre-payment settings, for your information, need internet connectivity.
To add extra layer of security and to make the process foolproof, you define following metrics before making the fund available for the offline pavement–
An expiry date for fund – this sets limit for use of the available offline funds. Thus, if you’re going for grocery shopping, you can set a limit of few hours. After the expiration of limit you won’t be able to spend the money you made available for offline use.
Maximum number of transaction: you can set a maximum number of transactions one can make from the funds made available for the offline use.
Locations setting: You can set the locations where the offline payment in Google Wallet can function. This is the best feature that bolsters the security of offline transactions. Just in case, your Wallet gets compromised, the location restriction saves you from the possible disaster.
Making the Payment
Let say you’re in a supermarket and want to make payment in offline mode. You get connected to the salesman payment device using Bluetooth or other NFC means.
Now salesman will trigger a withdrawal request from his system. In response, your smartphone will send him the balance details. You will enter your password on salesman system to unlock the balance details.
Salesman system now confirms other details like your balance certificate that indicates the amount of funds available, your withdrawal record for confirming your identity.
Once salesman system confirms these things, it sends you back a success report of the transaction.
You’ve made an offline transaction from Google Wallet, and now it’s time to update the accounts.
As soon as you get the internet access, the Wallet sends the offline transaction records to the account manager. The account manager updates your funds and sends back an updated balance sheet for future transactions.