Google Wallet In Limited Launch

Google has gone live with its hotly anticipated Wallet application at last, though it will hardly hit the mass market yet - it runs only in the US, on the Sprint network, and on its own handset, the Nexus S. 



Focal Points:

• However, the firm can now put the NFC-enabled service through its paces and gauge consumer enthusiasm, and is already promising that future releases will be broader, and far more significant. Support for other Android devices will follow before year end though timelines for international versions remain vague - even though NFC uptake is higher in some European and emerging markets than in the US.
• In its first iteration, Google Wallet allows users to pay for goods by swiping their handset against a reader, with funds taken either from a Citi MasterCard or a Google Prepaid Card (which can be loaded from any other credit card). Google will give customers a $10 bonus if they sign up for the prepaid card by the end of this year, as it looks to spur uptake of the Wallet and insert its brand and services into every link in the value chain. It also has deals lined up with Visa and American Express.


• Google announced 15 large stores, which are supporting Wallet NFC readers, including RadioShack, American Eagle Outfitters, Subway, Macy's, Foot Locker and Walgreens.
• There are three aspects to the all-important security system - a PIN, which must be entered before making any purchase; a secure element within the device, a chip which stores encrypted credit card data separately from the handset memory; and MasterCard's PayPass technology, which encrypts credit card details as they pass between the phone and NFC tag.

Editor’s Note: Experton Group cautions that while the security system may seem secure, additional checks and balances will be needed to make consumer’s comfortable with this type of payment method. This has not stopped a number of financial institutions who are implementing new processes, such as electronic check deposits.

It is anticipated that it will take some time, and a number of missteps before this becomes a fully accepted, secure method to transact business.