Mountain View, California — Google continues to gobble up start-ups, and ramped up efforts in expanding services once again, acquiring Zetawire, a Toronto-based start-up company on mobile payments, a deal that supports its Near Field Communications (NFC) ambitions.
Zetawire was in an extremely early stage when snapped up by the search engine giant; very little is known about what they were working on. However, this information was revealed by tech analyst firm 451 Group, which saw the disclosure in a notice from Zetawire’s law firm, Fenwick and West, which mentioned the acquisition. It revealed that the startup had been granted a patent for “mobile banking, advertising, identity management, credit card and mobile coupon transaction processing.” That is the secret sauce needed for turning a smartphone into a credit card, so there does not seem to be much question as to why Google would want to purchase that technology.
The Toronto-based company had barely begun but had a US patent for an end-to-end way to pay for goods in person with a mobile device like a smartphone. Terms of the acquisition, along with when the buyout plans were hatched are unknown, however, the acquisition was concluded in August. This coincides with the acquisition of both social apps company Slide and social currency company Jambool.
Google has been hard at work in the area of NFC. This acquisition bolsters the search titan’s position in the coming wave of NFC and the phone as a device for payments, tracking and identification. These are the same chips that are found inside your credit card. The latest Android, the Nexus S, is the first phone to include an NFC chip, and that is what is required to go forward with mobile payments.
NFC is expected to become much more ubiquitous in 2011 both in actual deployment and in phones. Most major US carriers are putting their trust in Isis, which could settle on a common standard for the very short range wireless payments across the US. Considering the scenario, Zetawire’s technology might mesh seamlessly with what Google has been doing in the area of NFC (near-field communications). Hence, for Google, the timing of the deal could not have been better.
Meanwhile, Google’s rivals are hard at work too. Research in Motion has also filed a patent for NFC functions in BlackBerry, and Nokia in June announced that all of its phones will have NFC capabilities by 2011. Isis, a partnership involving telcos AT&T, T-Mobile and Verizon, is also planning a similar mobile wallet and UK startup Proxama has been working on NFC-focused technology for payments and advertising.
The NFC war is officially on and phone carriers are scrambling to get NFC chips installed on their new phones. Therefore, Google may be most concerned about inroads from Apple. It is rumored to be integrating NFC into the iPhone 5 and may use for NFC-based portable Mac accounts, where a user could bring a profile over just by bringing an iPhone close to a suitably equipped computer. Apple, Google and most others are also likely to use NFC to get a foothold in Japan, where NFC has been used for years in the FeliCa system that many rely on for subway trains and some shopping.
Expectedly, NFC will be everywhere by next year, taking over new and planned mobile phones and devices. So let us wait and watch who wins the race…