updated 01:15 pm EDT, Thu May 26, 2011
Google Wallet intros with Sprint, Citi, MasterCard
Google at its New York City event launched Google Wallet as the first major NFC mobile payment system in the US. The platform revolves around the concept of virtual cards, including a Google Prepaid Card, that lets users pay at a store just by bringing the phone close to a terminal. It ties in directly with Google Offers and can give offers based on the phone's location, deals pushed from the web, and NFC tags built into posters and other ads.
Offers themselves can include loyalty programs for frequent shoppers. In the future, it could involve a Foursquare-like game element, Google said.
The system is designed to take extra precautions for security. Users at a minimum need to have a Google PIN code, encrypt the data, and never show the full card number after registration. Google also talks to a trusted services manager handled by First Data that creates a unique identifier only viewable by the bank and the phone to prevent the payment from being hijacked.
Wallet will initially work with Citi MasterCards along with the Prepaid Card and should work with any place that has MasterCard PayPass. NFC will work at the roughly 1,000 and growing locations that support NFC through a system known as SingleTap. Sprint is the initial carrier partner and is using the Nexus S 4G as the test bed due to its mix of Android 2.3 and NFC; it's not clear if the T-Mobile Nexus S will work.
Field testing for the service is starting today and will take Google Wallet live in the summer with stores such as American Eagle Outfitters, Duane Reade, Subway, Walgreen's, and others. More banks, credit cards and devices are coming soon, and Sprint named HTC and Motorola as possible candidates along with the Nexus S' designer, Samsung.
The approach is characterized as open and won't be locked into particular devices, institutions, or stores, with an API coming to let companies talk to the system for free. Its implementation could create significant pressure on other phone platform creators that were either considering their own NFC payment methods or had yet to commit to anything in particular. RIM has included NFC in the BlackBerry Bold 9900 but hasn't talked about who might used it.
Rumors have circulated as to whether or not the next iPhone may get NFC. Apple has hired staffers experienced in the area but hasn't given immediate clues beyond hints from Verizon and others of a Qualcomm dual-mode chipset that would enable it. Although Apple's wariness of Google due to Android may prevent it from building in native support, it's likely the case that Google could create a Wallet app for iPhones that would fill in.