What Is Google Wallet?

Today, Google took to the stage in New York to unveil their newest tool for consolidating all of your most valuable info under the Google banner: Google Wallet. Now, digital wallets are nothing new on Android (or any platform). What sets this service apart then? Three words: En. Eff. See. Utilizing the NFC hardware in Google’s Nexus S, as well as plenty of other upcoming hardware, Google is working on rolling out a contactless payment system that will consolidate all your cards and payment methods in one place and let you manage them from one, handy little app.

Are Credit Cards Really That Hard To Use?

No, they’re not. However, arguments aside about whether or not folks will use an entirely different system that’s not any easier (it’s happened before), the Google Wallet service aims to actually take you one (or more) steps further than simply being a makeshift credit card. Google is also teaming with retailers to incorporate your rewards cards into your Google Wallet. Need that pointless Rite-Aid card to get the extra $0.50 off your energy drink? One swipe of your phone will apply the discount/rewards points/etc. and pay for your purchase at once. Kinda handy!

Another added benefit, as witnessed in Engadget’s hands-on video, is the ability to store and save gift cards in your Google Wallet. Imagine if every Christmas, when you get a slew of $5 and $10 gift cards to Subway, McDonald’s, and American Eagle (you have weird friends and family), it’s a quick matter of scanning a barcode on the card with your phone’s camera, and then you suddenly have all of those cards available at once. If this service provides nothing else but the ability to manage remaining balances on gift cards without dialing a f$&@ing 800-number, it might just be worth the switch.

OK, But What About Security?

Good question. And ultimately, it’s gonna be up to you to decide if you feel comfortable with this. On the one hand, you will eventually have the option to put all your credit cards (starting with Citibank MasterCard, though more will follow) in one handheld device. On the other, you already did that the day you stopped relying solely on checks and cash.

For Google’s part, they’ve put a pretty heavy emphasis on security. For starters, entering a PIN is necessary to conduct any transactions. Additionally, the actual NFC hardware in your device will remain inactive unless the Wallet app is open and unlocked, meaning no one could wave an NFC reader at your butt and get your credit card info. It’s unclear how this would work if any third-party apps wanted to use the NFC chip for non-commerce purposes, though it’s a safe assumption that any NFC apps would be sandboxed from each other.

Google also made a point to address data ownership issues. The short version is: no organization will own any of your data that doesn’t already have a legitimate claim to it. Google will not be keeping a record of your transaction data (though they keep records of transactions via Google Offers, a separate but linked service similar to Groupon). Your bank data will belong to your bank, your loyalty programs data will belong to the retailers you signed up with. Of course, this isn’t really any improvement over the current situation where dozens of companies have tons of information about you, but at least it appears to be no worse off.

At least on the Nexus One, Google engineers tell us that the hardware itself has its own protections as well, including tamper sensors and “protection from laser attacks”. Whatever that means. Sounds cool, though.

And worst-case scenario? You can remotely wipe the device. No details yet on if this is a Wallet-specific service or if Google is rolling out a platform-wide remote wipe system. Hopefully the latter is at least in the cards, if not here already.

That’s All Well And Good, But I Don’t Have A Nexus S

It’s true. The pool of NFC-capable devices is pretty shallow. So’s the pool of NFC-capable cities (field-testing begins today in New York and San Francisco, a full launch is expected this September). Google says they’re intending to work with OEMs to bring plenty more NFC-equipped devices to market over the next year. Obviously, it’s up to the manufacturers, but Samsung, HTC, and Motorola all got name-dropped during the press conference, so here’s hoping at least a few will make it out there.

Additionally, and perhaps the ugliest of the hacks announced today, is Google’s announcement that they apparently have NFC-enabled stickers that could be placed on a device to give a non-NFC-capable phone NFC powers. It’s unclear just how such a sticker would communicate with the phone (WiFi? Bluetooth? Magic?), but the Goog says it’s possible. And hey, it wouldn’t be the weirdest thing they’ve made wireless this year. So, who knows? Still. If you’re looking for the most seamless NFC experience, at the moment you’re best bet is to pick up a Nexus S on Sprint and live in New York or San Francisco, eat at Subway and get your clothes from American Eagle. Otherwise, your digital payment revolution is gonna be delayed.

What If I Don’t Like Or Use Android?

The answer suddenly gets a little ambiguous, but Google says they “will partner with everyone.” For what that’s worth. It’s unclear if other mobile OS operators will accept such an offer, but at least this doesn’t look like it will get locked down to Android if other OS operators don’t want. What’s even more unclear, however, is if, say, Apple or Microsoft would be able to create their own mobile wallet system and integrate it into the same network. Google says that this service is being built on an “open platform”, but it’s unclear what that platform is. Is it built on MasterCard’s PayPass system? Is it a more ubiquitous NFC standard that happens to include PayPass? Could you stick a Google NFC sticker on an iPhone 4 and use this service? It’s entirely unclear just how this will work. Though you can bet that when (if) it does materialize, either Google themselves, or their critics, will be more than happy to tell you exactly what you can and can’t do with it.

Hopefully, though, if nothing else the hardware and payment networks will be interoperable. The PayPass system isn’t the only game in town. The worst of all possible outcomes would be if you had to choose which method of payment you used or which stores you patronized based on which mobile operating system you chose. Sadly, given the egos of all the types of companies involved, which include wireless carriers, handset manufacturers, credit organizations, retailers, and financial institutions, it’s more than likely we’ll at least face an interim period where this will be the case. At least until everything settles and most retailers accept most methods of payment, as eventually happened with most major credit cards. Hold on to your seats, though, for the next major payment system wars.

Ok, So, What Else CanĀ I Do With This?

That’s where the real fun begins. The services shown today were merely digital representations of what’s already in your wallet: credit cards, gift cards, loyalty cards. Much of this consolidation has already been done before (to varying standards of quality), but this seems like a concerted first effort to bring it all under one banner. What happens after that? Who knows!

Perhaps your personal finance app will not only be able to keep track of your purchases, but actually cut you off when you reach spending limits. Google suggests your phone could very well someday be your boarding pass. Or concert tickets. Perhaps someday your grocery list will be tied to your wallet. You’ll walk into a store and get notified of coupons, then when you go to checkout, your coupons will be applied, your items paid for and removed from your shopping list, all in one quick tap. Truthfully, the sky’s the limit.

Should I Really Be Excited About This?

To be honest, unless you fall into the very narrow category of urban-dwelling techno-hipster, probably not. But it’s certainly something to think about! Seriously! One of the coolest parts of this new service is that Google’s teamed up with MasterCard’s PayPass system, which is already widely in use. Google’s Where It Works tool can show you locations around your area where PayPass is already deployed and, we assume, where Google Wallet will soon be supported. I was actually rather surprised to find that several places in my suburban Georgia town were already outfitted, including Arby’s, BP, and Walgreen’s. Not an overwhelming flood of options, but certainly enough that I could try this out without going out of my way. Or even use the service for places I already go in a few rare cases.

Except that I don’t have an NFC-enabled phone. And more than likely, neither do you. And even if we did, there’s only a small fraction of us that actually live in one of the testing grounds for this new service.

However, up until this point, NFC has remained little more than a whisper and a rumor in the tech world. Oddly, in fact, this announcement is coming nearly six months after the Nexus S first launched on T-Mobile, and several weeks after the re-launch on Sprint. Even after we finally got the hardware for this service, we’ve still been waiting on someone to put it together. And now is when it starts.


Sources :

Google Wallet: http://www.google.com/wallet/
Engadget: http://www.engadget.com/2011/05/26/google-wallet-mobile-payment-service-google-offers-announced/

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