AndroidCentral was the first to report that Google is dropping support for NFC redemption of loyalty and gift cards from its struggling Google Wallet. The company urged users to spend their remaining balances by August 21, although it said it is working with retailers to offer “other options for gift and loyalty card redemption” through its mobile wallet initiative. Meanwhile, “you’ll still be able to tap your phone to make purchases” with Google Wallet’s NFC-based system.
The problem, of course, is that consumers don’t want to use mobile payments unless they’re tied to loyalty programs, mobile coupons or other features that actually encourage them to do so. Starbucks has proven that with its mobile payments program — which remains the lone success story in the U.S. mobile payments market — and Apple is making progress with its Passbook, which doesn’t yet support transactions at the point of sale. Until Google restores those kinds of features — or adds other ones that somehow bring value to mobile transactions — users have no incentive to turn to Google Wallet instead of credit cards or cash.