Google on Thursday unveiled a mobile wallet platform and field tests in New York and San Francisco that will let people with special phones pay for goods in retail shops by tapping the phones against a payment terminal.
The Google Wallet initially supports Mastercard credit cards from Citi and users can pay for goods at 120,000 U.S. shops including Macy’s, Walgreens, Subway, Noah’s Bagels, American Eagle, Bloomingdale’s, Peet’s Coffee, Toys ‘R’ Us and others.
Sprint is also a partner at the launch, since it sells Google’s Nexus S phone, one of the only phones in the U.S. capable of using the new Google Wallet. The Nexus S supports NFC, an open standard backed by many companies including Microsoft, Visa, Sony, Nokia and AT&T. However, Android now supports NFC technology and additional phones are expected to become available soon.
“We’re extending an open invitation to merchants and ecosystem partners like payment networks, carriers and banks to join us in creating tomorrow’s best shopping experience,” said Stephanie Tilenius, vice president of commerce for Google.
[Read: Can You Trust Your Data to Google Wallet?]
The wallet has some features that haven’t been in previous attempts to offer mobile wallets. For instance, the wallet can include multiple cards. In addition to the Citi card, Google is including a prepaid Google payment card that users can fill up from any credit card.
In addition, the wallet can include loyalty cards. When users pay for an item at the point of sale, with one tap they can transfer multiple cards, including their credit card and the loyalty card.
“The idea is to continue to partner and add cards to the wallet so hopefully I’ll be putting all my cards in there,” said Osama Bedier, vice president of payments at Google. The executives unveiled the new service at an event in New York that was webcast.
Google expects to officially release the product this summer in the U.S. Google officials also said that some 300,000 international retailers have the capability to support the mobile wallet, but they did not elaborate on plans outside of the U.S.
Google Offers Announced
In addition to the wallet, Google introduced Google Offers, which lets users collect electronic coupons and submit them at the point of sale. People can find coupons online and click on a button to send the coupons into their Google Offers account to make them available on the phone.
Coupons can also be redeemed simply by showing a cashier the coupon, so they can be used at retailers that haven’t yet upgraded their systems to accept NFC.
Google Offers will become available to people in San Francisco, New York and Portland this summer.
Google hopes to expand the wallet to include many other items including driver’s licenses, hotel keys and concert tickets.
Later this year, Google also plans to add a feature that will let retailers pass receipts to users via the Wallet technology.
Companies have been trying to kick-start mobile payments for around a decade, and Google acknowledged that despite its announcement, there are still barriers. “Today we’re announcing the first steps to making this vision a reality. It will take a while to come to fruition,” said Tilenius.
Security Concerns Addressed
Security is one issue that may have slowed down the progress of mobile wallets. The Nexus S uses a smart-chip secure element from NXP, the same kind of chip used in electronic passports and in contactless and contact-based credit cards, said Rob Von Baron, a security engineer at Google. The cards have tamper sensors so if someone tries to physically access a card it self-destructs, he said. It also has protection against laser attacks. All payment card credentials are encrypted and stored on the chip, which is separate from the Android device memory and accessible only by authorized programs.
Google has added other software security elements. Users can first set a PIN to unlock the phone. They’re then asked for a PIN to open the wallet. They can also set a preference so that the card is inactive unless the wallet app is open.
“Security is very important to us,” Bedier said.
Distributing capable phones is another challenge. On stage during the event, Fared Adib, Sprint’s vice president of product development, said it would work with “the Samsungs, HTCs and Motorolas” of the world to support Google’s program. But there was no mention during the prepared remarks if the system would support operating systems other than Android.
Nancy Gohring covers mobile phones and cloud computing for The IDG News Service. Follow Nancy on Twitter at
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