Google Wallet arrives in the US

20 Sep 2011

Google Wallet is being rolled out to all Nexus S 4G devices on the Sprint network in the US.

The Google Wallet app allows users to pay for goods using their mobile phones, thanks to near field communication (NFC).

Users can add their Citi MasterCard details to the app and, by swiping their phones over in-store terminals, they can pay for goods on this card in seconds.

Those without this credit card can set up a Google prepaid card, which can be funded with any credit card. Early adopters will be given US$10 to spend by setting up the app before the end of 2011.

Visa, Discover and American Express will join the app in the future, according to Google.

Along with credit cards, the app contains loyalty cards, Google Offers and a history of purchases. Google hopes it will stretch further to travel cards and boarding passes.

The app is secured with a pin number to protect payment data. Credit card details are protected within the “Secure Element” chip, which offers multiple levels of protection. It’s separate from the main OS, only allowing authorised apps, such as Google Wallet, gain limited access to this data.

The Google Wallet app is available now in the US for Nexus S 4G phones on Sprint through an over-the-air update.

New revenue opportunities for Google

Ovum principal analyst Eden Zoller believes that the move to mobile payments will give Google the opportunity to drive new revenues besides advertising.

“Google has several related services alongside the new Google Wallet offering that if pulled together effectively could make for a compelling commerce framework with increased revenue potential,” said Zoller.

“Google is the master of search, provides popular location services, is building up a social media play in the shape of Google +, has a Groupon type proposition via Google Offers and is carving out a strong position in the mobile device value chain. If Google is smart then Google Wallet could be about a lot more than just mobile payments and incorporate loyalty schemes, check-ins, and advertising, among other things.

“The challenge for Google is how quickly it can build up a compelling ecommerce operation of this kind in face of very competent rivals that are aiming to do exactly the same. The line-up here up includes Amazon, Facebook, Paypal, telecom operators like Orange France and social commerce providers such as Groupon and Living Social,” said Zoller.

Zoller also emphasised the need for Google to be “very mindful” of privacy issues.

“A payments service like Google Wallet linked to location presents a gold mine of customer and transaction data that Google will inevitably want to exploit. But it must only do so in a way that respects privacy and guarantees security,” said Zoller.

“If it fails to do this it will lose consumer trust and credibility among commerce partners, and without this its commerce ambitions will come to nothing.”