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Google Wallet Revolutionizes The Way You Pay

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So far, Google Wallet users can only use MasterCard and Visa, although Discover and American Express will be available in the near future. (Photo: Stock.xchng)
So far, Google Wallet users can only use MasterCard and Visa, although Discover and American Express will be available in the near future. (Photo: Stock.xchng)


  • Google launches Google Wallet for Android smartphones
  • Application allows users to pay for purchases instantly without a credit card
  • Big drawback is very few phones are compatible with NFC technology

Google has launched an Android smartphone application called Google Wallet that allows users to make credit card purchases through their phones using a near-field communications, or N.F.C., chip. The technology has been available in Europe and Asia for some time, but Google is the first major company to bring it to the United States.

To use Google Wallet, users must first download the Google Wallet application to their phone, create a four digit PIN number and load funds to the app. So far, users can only use MasterCard and Visa, although Discover and American Express will be available in the near future.

How It Works

To make a purchase, the user opens Google Wallet, enters their PIN number and runs their phone over the N.F.C. chip reader terminal; the transaction takes a matter of moments. The phone will vibrate, and the user will receive a confirmation message on the phone’s screen. A confirmation message will also display on the terminal’s screen.

Once the app is installed, it can work even if the phone is off, but security is built into the device. If the PIN is typed in incorrectly four times, the app will stop working. It will also not work if the phone’s battery is dead. This is to ensure if a phone is stolen it will not be used for fraudulent purchases.

There are 150,000 chip reader terminals in the US, and an additional 230,000 readers are located oversees.

In the future, as more merchants participate, Google Wallet will offer the ability to use loyalty cards and electronic coupons, called SingleTap. Google Offer, which is similar to Groupon, is already part of Google Wallet although, unlike Groupon, it is available in very few cities.

SingleTap is currently available in only a handful of national chains. Google says 30 more national chains are in the pipeline.

In the future, the search engine giant hopes to replace more items people carry in their wallets such as tickets and boarding passes. It also hopes the app will someday offer people deals as they browse through a store.

Drawback: NFC Technology Readiness

There are some drawbacks to Google Wallet, however. Very few smartphones have the N.F.C. chip built in. Five more phones that have the N.F.C. chip will be released by the end of 2011, and if Google can complete its bid to purchase Motorola, all new Motorola Droids will be available with the N.F.C. chip.

The purchase history in the app is vague, only listing the time but not the amount or where the purchase was made. To get this information, users must call Money Network.

It will also take some time for merchants to install the N.F.C. chip reader terminals.

Google Wallet is currently only available for Sprint customers.

Key Statistics – Worldwide Mobile Payments

  • The most common mobile payments are between $2.50 and $10.00. (source: mopay)
  • In 2010, the majority of mobile payment consumers, around 60%, were repeat buyers who on average spent $50 a month or less. (source: mopay)
  • By 2014, the number of people completing mobile transfers worldwide is estimated to be 490 million; today, there are an estimated 81.3 million users. (source: Portio Research)
  • Global mobile payment transactions are expected to total $634 billion by 2014, up from nearly $69 billion in 2009. (source: Portio Research)

By Melina Druga for
Melina Druga is an author and freelance journalist. You can follow her on Twitter @MelinaDruga .

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