Google to Introduce New Version of Wallet Next Month; iPhone App Possible
UPDATE: LAS VEGAS, Nev. – Google plans to announce a new version of its Google Wallet by mid-November, which would include a greater role for offers and expansion of the platform to other devices, including a possible app for the iPhone, NFC Times has learned. END UPDATE.
Google also plans to roll out a Google co-branded credit card that will be accepted on Discover Financial Services’ U.S. acceptance network, said sources.
Google’s vice president of wallet and payments Osama Bedier, speaking at the Money 2020 conference in Las Vegas Monday, said the company was “putting the finishing touches” on the Google Wallet 2.0. This will be the follow-up to the present cloud-based wallet, which Google refers to internally as Google Wallet 1.5, and which it launched in August.
Bedier, however, declined to reveal any details of the new wallet or to confirm the partnership to roll out the magnetic-stripe co-branded credit card with Discover.
Discover’s head of digital, Mike Boush, who spoke on a panel Monday at Money 2020, referred questions to Google when asked for comment by NFC Times about the deal.
The agreement with Discover would enable Google to broaden its payments service and collect more transaction data, not having to rely only on users with Google Wallet phones tapping at contactless point-of-sale terminals to generate data.
Discover announced a similar deal with PayPal in August, which next year would enable consumers with PayPal-issued cards to use Discover’s acceptance network of 7 million merchant locations in the U.S.
While Boush declined to confirm the Google deal, he said during a panel discussion with other financial institutions that Discover seeks to take its large POS-terminal network and “white label it to businesses that will make use of it.”
Bedier had been expected to announce the wallet and likely also the Discover deal Monday, but for some reason only mentioned that the new wallet version would be unveiled next month.
Google Wallet 2.0 will continue to use NFC technology on the front end to conduct transactions with a prepaid application from Google supporting MasterCard PayPass and stored on a secure element in NFC wallet phones. The transactions will continue to be funded by cloud-based credit and debit cards that consumers would load into their wallets, sources said.
UPDATE: Google would integrate offers, couponing and related promotions to a greater extent, using its acquisition of processor TxVia, said a Google source.
In addition, Google will be applying to Apple for permission to make a Google Wallet app available in the Apple app store. The app would be used for online transactions, said a Google source. The iPhone, of course, doesn't support NFC and even if it did, Google wouldn't have access to secure element to store its prepaid card, needed to conduct in-store NFC transactions
In a teaser for the next Google Wallet version on its Google Wallet Web site, the company asks prospective users what mobile device they use, showing illustrations of an iPhone and other smartphones, in addition to that of an Android phone. The iPhone app likely would be used for online offers and online purchases, though still requires approval from Apple, so it might not be ready in time for the unveiling of Google Wallet 2.0, said the Google source. END UPDATE.
Bedier on Monday talked in general about Google’s strategy and approach to the wallet during his keynote presentation and in an interview with NFC Times.
“Our goal is ubiquity, to be on every smartphone, every (device),” Bedier told NFC Times. “Everyone who has a Google account, which is practically everyone, we want them to be able to use Google Wallet.”
During a question-and-answer period following his keynote, he said Google was already making use of its acquisition of U.S.-based TxVia, announced in early April, for the Google Wallet 1.5. TxVia provides a payments platform for processing a range of prepaid cards, including general purpose and gift cards, as well as payroll and government disbursement cards.
“They’ve become a core part of the Google Wallet product that you see today,” he said. “We leveraged TxVia to launch the 1.5 version of the wallet. It’s actually a big component of the 2.0 version that we’re about to launch. And it’s becoming even a core part of our core platform for everything else.”
UPDATE: Google has been working on P2P payments and is building support for it into its Android mobile operating system. But a source at Google told NFC Times it would not be part of Google Wallet 2.0. END UPDATE.
When asked by NFC Times whether Google was working on P2P payments, Bedier said the company already has a “very powerful payments platform now that we can use for just about anything, including peer-to-peer payment.” P2P would add to the variety of uses for the wallet, he indicated.
“As a wallet, we feel it has to work everywhere, literally everywhere, and that means consumers and merchants,” he said.
NFC Remains Part of the Strategy
Bedier, when asked by a moderator following his keynote presentation about the company’s level of commitment to NFC, said the technology was only a part of Google’s strategy and would be called upon “in certain use cases where it makes a lot of sense.”
That is an obvious reference to Google Wallet payments at the physical point of sale, using the MasterCard PayPass-enabled application stored on the embedded chip in Google Wallet NFC phones.
Bedier added that “in many other cases,” payment could be handled in the cloud, without using NFC.
He showed two apps during his keynote: Tabbedout, which enables consumers to pay their bar tabs with a preloaded credit or debit card; and Uber, a taxi- summoning service that also lets users pay with a preloaded credit card on the network, without having to hand over a payment card to the taxi driver.
But Bedier said that Google would continue to use NFC for certain payments and other communication between devices.
“We think there’s got to be a way for two smart devices to connect, and if anyone out there has a better technology, we’d love to hear it,” he said. “I ask the question all the time and get blank stares. It’s not Bluetooth, and it's not Wi-Fi.”
He noted that NFC also could enable consumers to check in with merchants by tapping an NFC tag after they enter the store. The consumers also could download a coupon by tapping, say, a shelf tag in the aisle.
“These will happen as consumers see inherent value,” Bedier said. “But, again, it’s not going to be our only strategy. It’s just a part of our strategy and stay tuned for other parts of our strategy.”
More than Payments
Bedier continued to emphasize that the Google Wallet experience will take in much more than payments.
That could start with a Web search by consumers on their Android phones, he said.
“You find a great offer or a great loyalty card or whatever,” he told NFC Times. “Whatever you want to put in your wallet, single click and have it in your wallet and then redemption and use should be seamless and automatic.”
The search giant has made no secret that its business case for the wallet is selling targeted ads to consumers. Bedier, in fact, described Google as an “advertising company” during his keynote.
By enabling payment in its wallet, the company collects valuable consumer transaction data. It combines this with other information, including item-level data, it collects from certain merchants that agree to provide it. Google uses all of this data to send the targeted ads and offers.
The company loses money on each wallet payment transaction because it pays card-not-present merchant discount rates when the in-store purchases are funded by the cloud-based credit and debit cards.
Google, however, has been negotiating with payment schemes, such as Visa, to reclassify these card-not present transactions as card-present purchases–arguing that it can pinpoint the location of the consumer in the store.
Google also faces liability risks for fraudulent Google Wallet transactions.