Google Wallet, Google's groundbreaking initiative to allow U.S. consumers to
pay for items using their phone as a virtual credit card, simply works.
That's good news for Google, because millions of Americans already know how
to pay with a plastic credit card. However, Wallet currently lacks the
conveniences and benefits that will be needed for its long-term success.
Google Wallet has been launched in a public trial, the new jargon for a beta
test, about four
months after its introduction. Using a small near-field communications
(NFC) antenna mounted inside the rear of the phone, an embedded security token,
and some accompanying software, Google Wallet allows users to simply tap (or
touch) the phone to a payment terminal. Money is automatically debited from an
attached credit card.
Why use Google Wallet? Because it implicitly promises that you'll eventually
be able to leave your wallet at home, or at least stuff your driver's license
into a shirt pocket.
"Really, this is a tool for consumers," said Marc Freed-Finnegan,
the senior business product manager for Google Wallet, in an interview.
"We hold your card. We hold your stuff. And we pass the card to the
merchant, as if you tapped a plastic card. Google isn't processing, we're not
in the middle of the transaction, and we're just creating this tool to organize
your life, create money with offers, and organize your life with your loyalty
card."
Google
announced Google Wallet in May, saying then that Google Wallet will work on
Sprint's Nexus S 4G, MasterCard credit cards issued by Citi, and at retailers
equipped with Mastercard's PayPass terminals. The transactions will be
processed by First Data, an Atlanta-based company.
On that score, nothing has changed, leaving Google Wallet available to just
a small subset of phone users who have purchased a Nexus S. (Nexus S owners
will be able to download the Wallet app from the Android Market today as part
of an "expanded public trial".) Over time, though, Google is expected
to add Wallet capabilities to more and more phones, assisted by its purchase of
Motorola's cell-phone business. For now, unfortunately, it's easy to dismiss
Google Wallet as a nice gimmick to impress workers manning the counter at
popular national fast-food restaurants.
Google said it has also licensed the Visa, Discover and American
Express NFC specifications, so that those cards can be entered into future
iterations of the Google Wallet. "With this partnership, Visa account
holders will now be able to use Google Wallet through Visa payWave," at
hundreds of thousands of terminals worldwide," a Visa spokeswoman said in
an email.
It's also worth noting that Visa and PayPal have also
promised their own NFC solutions, but Google is first out of the gate.
Apple, so far, has remained quiet.
How it works
I wrote previously that what Google Wallet needs
to succeed is to establish itself as a habit. After testing Google Wallet
with a Google-supplied Nexus S off an on for several weeks, I can report that
is in fact the case. Google Wallet is also about as fast as paying with a
credit or debit card.
Here's how it works: you open the Google Wallet app, punch in a 4-digit PIN
code to unlock it, and then, when it comes time to pay, touch the phone to the
terminal. Behind the scenes, the NFC radio transfers the money securely. The
transaction takes just a split second; the phone vibrates, and its screen
displays "Sent!" No signature required - you're done.
Simple, right? For the most part, yes.
The first time I flew solo on Wallet, it didn't work. It may have been my
fault; I was unfamiliar with the technology, I was in line at the pharmacy to
pick up a prescription, and I didn't want to fool around. But you'll also
notice that transactions won't go through because the person behind the counter
simply doesn't know you've paid. Remember, they're trained to look for a
customer swiping a card.
By the end of the trial, however, using Wallet came naturally. Enter the PIN
("PIN in," in Googlespeak), tap, and go.
Before you pay, however, you'll need to know how to actually load funds into
the Wallet. Users have a choice of either using a Citi Mastercard or, as most
will choose, a Mastercard-backed Google Prepaid Card that already exists inside
the Wallet app. Google implicitly encourages using the latter, and will give
you a free $10 if you load it by the end of the year. If you've ever used a
phone card or some rail passes, the concept of "topping up" the card
by periodically adding funds to it shouldn't be too foreign.
In either case, you'll need to link the Citi Mastercard to an actual
physical card you own, or link the Google Card to your existing credit card.
Tapping the "Payment Cards" icon within Google Wallet reveals how
much money you have available. Tapping the Google Prepaid Card again also
allows you to top up the card and displays a user ID and phone number to call
in case of problems. You'll be dealing with the Money Network, a third party
that Google has contracted with to administer the card.
Security
According to Google's Freed-Finnegan, you get five chances to enter the
correct four-digit PIN. If that fails, he said, the phone's secure
element is wiped clean. According to Money Network's support staff,
however, mistyping the PIN five times will generate an error message and
an offer to email you a new PIN. If accepted, instructions to create a
new four-digit PIN will then be emailed to you, using your Google email
address associated with the card.
If you lose your phone, you'll need to contact your carrier (Sprint).
Don't worry, though: if a thief steals your phone and immediately
mistypes the PIN five times to receive an updated PIN, the thief will
still need to know your name, address, Social Security number, and other
identifying information to set up a new PIN. Incorrectly identifying
one of those fields will force the thief (or you) to fax over proof of
identity, according to Money Network.
Topping up the card also comes with its own hurdles. Google forces you to manually enter all of the card information each time
you want to top up your prepaid card. Consider this a security feature
rather than an annoyance; in the off chance you lose your phone,
wouldn't you want the thief to have to enter his own card information,
rather than use yours? After the card is approved, however, you can
manually enter the amount that you'd like to add to your card.
The transfer was accounted for by my credit-card provider as a purchase,
not as a cash advance, and charged to Money Network LLC. It's also
worth reiterating that the Google prepaid card is a Mastercard, owned by Metabank, with all the fraud protections that Mastercard offers.
Once you have funds loaded onto the Wallet, you're ready to begin using it. But where?
Google Wallet: I'm loving it?
Google preloaded my Nexus S with a Mastercard PayPass Locator app, which
allows you to search for restaurants, shops, and other locations near
you, or a given location, with PayPass (and, by default, Google Wallet)
enabled. At this point, you have few choices.
If you like junk food, however, you're in hog heaven. If you open the
app and look for places to eat (the burger and shake icon) chances are
that it will be either McDonalds, 7-Eleven, or Jack in the Box. Other
PayPass-equipped stores include CVS, Rite-Aid, Walgreens, Duane Reade,
Peet's Coffee, the Home Depot, Foot Locker, Office Depot and Best Buy.
Sure, you'll also find a few local businesses that use Google Wallet,
but they're few and far between.
One downer: in tech-friendly San Francisco, south of Mission St. is a
virtual wasteland where Google Wallet is concerned. South of Market
isn't much better. Two exceptions: AT&T Park and Whole Foods, a pair
of pricey venues where you might end up topping up your Wallet before
you even leave the store. New York fared better, with numerous chain
stores using the technology, and New York taxicabs.
Chin up, though - the app isn't perfect, and new locations are being
added every day. You may also run into a merchant that for some reason
has been left off of the app - one McDonalds in my town wasn't listed,
and its payment terminal didn't have the Mastercard logo. But the phone
reported that the payment had been sent, and a receipt confirmed it.
Promises unmet, as yet
"Your phone will be your wallet. Just tap, pay, and save," said
Stephanie Tilenius, Google's vice president of commerce, at the May
launch. So far, two out of three ain't bad.
Theoretically, Google Wallet offers the ability to upload third-party
payment and loyalty cards as well, another step in eliminating the George Costanza-style wallet.
However, aside from an agreement with American Eagle, that that
capability has yet to be truly enabled. Expect more partnerships to be
announced next month, I was told.
Google also hopes to eventually add the sort of "buy ten sandwiches, get
one free" loyalty cards favored by smaller shops. "Everyone expects
that Google has some sort of master plan, when in reality we have
numerous programs running in parallel," Freed-Finnegan said. In other
words, not yet.
Google Wallet already ties into Google Shopper, a nifty-looking mobile
app which displays discounts from merchants near you or another
location. According to the app, deals that you select are saved within
your Wallet, and then triggered using a QR code or other
acknowledgement. But my Offer screen displayed a large blank spot where
the code should be, and I didn't bother driving fifteen miles to argue
about whether or not I should receive a free order of churros with my
burrito.
The in-app history of purchases also needs work. The history records the
time at which "tap event" (not purchase) was made, but not the amount
or location. To get that information, you'll need to call Money Network
and speak with a live representative, a Money Network representative
said.
Conclusion
We all know the steps necessary to pay with a credit card at a grocery
store or coffeehouse: whip out the card, swipe, enter a PIN, or sign.
It's quick, easy, and an ingrained habit. Google Wallet has the same
potential.
While I very much doubt that states or federal agencies will allow
identification to be stored within a phone any time soon, if ever, I
think it's highly likely that tomorrow's kids will relegate the wallet
to the same anachronistic garbage bin as the floppy disk, cassette tape,
and VCR.
One case maker (The Callet)
already provides a case with an attached pocket for storing a driver's
license or credit card. (Ironically, it doesn't support any Android
phones as yet.) This is the future. Will it have a Google logo
emblazoned on it? Time will tell.
Sources: PCmag.com
