What the Hell Happened to Google Wallet's Cash-Free Future?

Illustration for article titled What the Hell Happened to Google Wallet's Cash-Free Future?

Almost a year ago, Google held a press conference to announce Google Wallet, an ambitious, multi-faceted plan for a cash-free future in which cell phones would replace hard currency.


A few months later, it arrived, but only on a single phone. Since then, we haven't heard much about Google Wallet. And it isn't like a total takeover was expected, not after today's prediction that it will take eight years for smartphone wallets to replace cash and credit carts. But still, what the hell happened?

The Vision

There are two main aspects to Google Wallet: payments and deals. Utilizing a near field communication (NFC) chip, Google Wallet promises to let you press your phone up against any compatible terminal to make a purchase. You'd upload your bank info to a Google Wallet app, or transfer funds from a designated Google account. No cards, no cash. Simply gadgetry.

For transactions eligible for a coupon or discount, Google Wallet would apply the promotion at the point of sale and adjust the final tally. Even if you were in the vicinity of a nearby discount, say, at a favorite establishment, Google would alert you to let you know. It would be a shameless, automated deal broker.

The Reality

When Google announced the Wallet last May, Mastercard was the only card company on board. With all the fanfare surrounding the announcement, it seemed like the product would launch with the major credit cards' support—Visa, American Express, and maybe even PayPal. As of now, Google has established partnerships with Visa and AmEx, but those companies do not yet exist on the actual product.


On the hardware side, the product launched in September 2011 with the Samsung Nexus S as the only device equipped with the Secure Element NFC chip required to operate Google Wallet's mobile payments. The Galaxy Nexus has since come aboard. Ten more compatible phones are promised this year, but they have not yet appeared. So, for several months, Google Wallet has only been an option for a few lucky Android owners on Sprint, and only very recently, AT&T.

It also seemed safe to assume Google had ironed out the Wallet system with the wireless carriers who sell the devices. But that was not the case. Verizon put up a quiet, but effective resistance to having Google Wallet on its NFC-enabled phones, citing security concerns. (Does Verizon, maybe, have another mobile payment technology in development?) As of now, no Verizon user—even one with a Galaxy Nexus—can take advantage of Google Wallet without resorting to backwater hacks.


That said, it's not all Google's fault. Here are a few other complications:

• Visa has plans for its own NFC-based payment solution, PayWave. But PayWave is still vapor at this point, and the company could be open to collaboration with Google. .


• PayPal introduced a Square-like card reader with the ability to scan checks and exchange money from phone to phone. A step in the right direction, but hardly as convenient as it could be.


• Speaking of Square, the company has dismissed NFC-based mobile payments on more than one occasion, claiming that most people don't even know what NFC is, let alone use it. While that may be true, it's sad that one of the companies with enough name recognition to push the industry along is unwilling to take a risk on NFC.

• Of course, there's Apple, a company that could probably turn NFC wallets into an overnight success. But Apple seems content to sit back and let everyone else bumble before making its own move.


• Google Wallet's security was cracked on rooted Android phones (and non-rooted phones). Google says the security holes have been fixed. But there's a question of trust.


The Future

What does Google do next to make Wallet a success? Bringing in new people to lead the project is a start.


Ideally, Google would get the Wallet up and running on other platforms. Realistically, it's doubtful that the likes of Apple and Microsoft would integrate a compatible NFC chip into devices for the sake of Google. But if either Apple or Microsoft does decide to add a Secure Element NFC chip, Google must find a way to make an app work on those platforms.

Google also needs to build out a hardware ecosystem. The contact-free payment terminals are slowly spreading through retail outlets, so Google's major need is to offer up handsets loaded with Google Wallet. Android is an open platform, and manufacturers can do whatever they want with it. Google needs to make them want the Secure Element chip, and in the process, find a way to stop letting Verizon dictate what does (or doesn't) go into its Android handsets.


Maybe then, Americans can really start thinking of a phone as a new type of wallet.



"Does Verizon, maybe, have another mobile payment technology in development?"

You guys need to learn how to do research! In August 2011, the big 3 in the US (T-Mobile, AT&T, and Verizon) kicked in about $100M to fund their previously announced joint venture in mobile payments called Isis:


So yes, the reason Verizon is getting in the way of Google Wallet because they're working on their own competing solution. Isis was announced in 11/2010 by those 3 companies, too. This isn't secret information.

It is still NFC based, they basically want to prevent Google Wallet from taking off so they can take a cut of mobile payments transactions themselves, instead of Google. Only problem right now is that they don't have their solution ready to go, and won't for a little while, where Google has partners for payments, hardware, and software all in place. Makes the carriers look kind of dickish until their own solution is ready......