Google’s VP of payments: Mobile commerce still needs “big leap forward”

The tech industry still has a lot to do if it wants users to pay for goods with smartphones and tablets.

To get consumers to convert to mobile payments, the payment system needs to go digital, says Google VP of payments Osama Bedier. Credit cards, debit cards, and gift cards all need to move into the cloud so they can be used more conveniently.

Inventory needs to live in the cloud, so that consumers can get their goods immediately and easily. The inventory of existing retail stores needs to be accessible and viewable online so users can go to the right place and pick it up, he says.

And identity has to be interoperable, so that you can sign up for gift cards that can be used across multiple sites without any worry about security. You should not have to sign up at every single store to get access to a gift card, discounts or credit.

If the industry clears those barriers, then mobile commerce will be able to bridge the gaps between offline commerce and online commerce, said Bedier, in a talk Wednesday at the Web 2.0 Expo in San Francisco.

What does the future of mobile commerce look like? Bedier said it is much the way it worked 50 years ago, when you went to a small store and the owner knew your name. They could tell you your favorite cheese is in stock. If they didn’t have something, they could order it and deliver it to you. If you forgot your wallet, they could put it on your tab.

“If the experience is like that, why would I buy anywhere else?” Bedier asked. “This is the experience we used to have. By solving these challenges, technology can bring this experience back.”

He said the web is going mobile in a big way, with mobile search queries up four-fold in the past year at Google. The web is also increasingly local, with 40 percent of searches on Google Maps now done with mobile queries. But the mobile payment system is lagging and it needs a lot of help.

“We are at an inflection point,” Bedier said, noting that smartphones are outselling PCs and broadband use on phones is starting to exceed broadband use on PCs. “We know there is potential to do more. For commerce to take a big leap forward, there are challenges we need to solve.”

The web is personal, since people are 20 times more likely to accept a recommendation from a friend or family compared to one that comes from out of the blue. But in many ways, e-commerce vendors are failing. Bedier said that, as much as companies say they are personalizing their pitches, consumers say that 75 percent of the time they receive a pitch for something they already have.

Mobile commerce promises to bring offline and online advantages together. Offline, you get to touch and hold a product and pick it up immediately. Online, you get the best selection and prices, but delivery is slow. Some merchants are starting to mix that up. Domino’s Pizza in the United Kingdom gets a third of its delivery orders online. Tesco has a heavily downloaded app that lets you scan grocery items in the store so that clerks can set aside the item for you to check out.

Soon, shoppers should be able to pay for the items with near-field communication (for another view on NFC, click here), which simply involves waving their phone over a reader. The sensor can detect that they’ve paid for an item and will let the shopper walk past a doorway without signaling an alarm.

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