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8/1/2012
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Google Wallet Now Supports All Major Credit, Debit Cards

Google's cloud-based service can handle payments for credit and debit cards from Visa, MasterCard, American Express, and Discover.

The newest version of Google Wallet now sports a feature that makes paying with a cellphone that much more a reality for non-techie users. Google has launched a cloud-based version of Wallet that "supports all credit and debit cards from Visa, MasterCard, American Express, and Discover," according to a post on the Google Commerce blog.

Google Wallet, a payment system that allows both online and in-store payments, was released to the public in September. In-store payments are processed via NFC, although few phones right now have native NFC capability. Google's Wallet site lists six for the United States, offered through Sprint and Virgin Mobile. The list includes Google's own Nexus 7 tablet. Plans have been made to enable other phones to use NFC via a sticker that is added to the case, but this hasn't come to fruition yet.

To prevent a stolen phone from being a security problem with Wallet, all credit card numbers are stored on Google's servers and not on the phone itself. Google claims the only identifiable thing stored in the phone is a number that identifies which wallet is associated with the phone. "This new approach speeds up the integration process for banks so they can add their cards to the Wallet app in just a few weeks," the company said.

Wallet can also be locked separately from the phone itself, and disabled entirely via the Web in the event a phone goes missing. A de-authorized Wallet is wiped if it attempts to contact Google's Wallet servers. You can also see all transactions made with Wallet via the online version of the app.

Many major retailers have also signed on to use Wallet, including Macy's, Bloomingdale's, Foot Locker, OfficeMax, Toys R Us, CVS, Sunoco, and Radio Shack.

The biggest direct competition for Wallet is, of course, PayPal. That company is all but synonymous with online payments, has a giant user base it can continue to leverage, and plenty of brand recognition.

Also, the two have clashed not only in the marketplace but also in court. Back in 2011, right after Google Wallet was announced for the first time, PayPal sued both Google and two of its ex-employees, claiming theft of various trade secrets relating to online payment. Apparently Google was working hand-in-hand with PayPal to create a mobile payment system, but according to the suit (read an online copy courtesy of TechCrunch) Google backed out at the last minute and recruited the former employees instead.

Another possible threat is the credit card companies themselves. MasterCard's PayPass is used as the NFC processing system, in conjunction with a virtual MasterCard card number created specifically for that wallet. In theory, MasterCard could eventually issue its own app to do the same thing, and leave Google entirely out of the picture.

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There's no doubt Google has made headway into businesses: Just 28 percent discourage or ban use of its productivity ­products, and 69 percent cite Google Apps' good or excellent ­mobility. But progress could still stall: 59 percent of nonusers ­distrust the security of Google's cloud. Its data privacy is an open question, and 37 percent worry about integration.
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