Google Wallet is being distributed in an over-the-air update to Sprint Nexus S 4G owners. The mobile app allows users of phones with near-field communications (NFC) hardware to pay for items using one of two virtual payment cards: a Citi MasterCard or a Google Prepaid Card, a card funded from a person's other credit cards.
Eventually, customers will get more payment options. In May, when Google introduced Google Wallet, it announced partnerships with Citi, MasterCard, First Data, and Sprint. On Monday, Visa, Visa Europe, and Google said jointly that Google has licensed Visa's NFC payment technology payWave. The deal will allow Visa-issuing banks to provide customers with the ability to add their credit, debit, and prepaid accounts to Google Wallet.
Payment card companies Discover and American Express are also working with Google to provide Google Wallet support.
"Our goal is to make it possible for you to add all of your payment cards to Google Wallet, so you can say goodbye to even the biggest traditional wallets," said Google VP of payments Osama Bedier in a blog post.
To achieve its goal, Google will have to convince merchants to participate. Google says that hundreds of thousands of stores utilize MasterCard PayPass wireless payment systems. But in a given area, these locations are likely to be few and far between. To help would-be Google Wallet aficionados use their mobile payment technology, Google offers an Android app to help locate merchants equipped with PayPass readers.
Google Wallet will be competing with whatever NFC solution Apple has devised, which may or may not debut with the iPhone 5 next month. Google also faces competition from a payment consortium called ISIS that includes AT&T, Verizon, and T-Mobile. ISIS isn't expected to have its payment system ready until 2012.
Whether or not NFC really offers a better experience than carrying a physical credit card remains to be seen. There are bound to be customers who prefer to swipe real credit cards, instead of deepening their dependence on their phones.
But affinity for physical credit cards seems likely to dwindle over time, as today's early adopters become tomorrow's mainstream consumers.
Sophos senior technology consultant Graham Cluley argues that adopting Google Wallet may not be the most secure option, due to the human tendency to choose insecure PINs and passwords.
"It's hard to imagine that all users are going to choose a PIN code for their Google Wallet which is hard to crack, let alone different from the one which they should be using to protect all the rest of their smartphone," he said in a blog post.
He also suggests that avid phone users who run their batteries down may find themselves unable to access their Google Wallet at inopportune times.
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