New Delhi: Google has announced the release of its Google Wallet application that can enable phones to make payments. The app is being initially offered on Sprint's network in the US for Sprint Nexus S 4G phones.
Google had first announced the app in May 2011. Google Wallet enables users to pay with their Citi MasterCard credit card and the Google Prepaid Card, which can be funded with any existing plastic credit cards. Earlly adopters who set up Google Wallet on their phones before the end of the year will get a $10 free bonus to the Google Prepaid Card.
Google is also adding Visa, American Express and Discover to its payment system, which aims to make cellphones the credit cards of tomorrow.
With a card in the Wallet, owners can pay in stores by tapping their phones on wireless-capable payment terminals, instead of swiping credit cards. There are more than 135,000 such terminals in stores and other retail locations, but that's a small fraction of the total number of terminals. Google's vice president of payments, Osama Bedier, couldn't say when cards from Visa Inc., American Express Co. and Discover Financial Services would work with the wallet. In the case of Visa, not only does Google need to work out the technical details of making its wallet compatible, it also needs to get the banks that issue the cards to sign on to the project, like Citigroup Inc. did for its MasterCard.
Google also needs more phones that work with the wallet. Bedier said Google is working with all major manufacturers of smartphones that run on Google's Android software to incorporate chips that communicate with payment terminals. Samsung Electronics Co. makes the Nexus S phone that works with the wallet today.
Visa plans to bring out its own, competing mobile wallet application. The competition isn't about getting a cut of the money that flows through the credit card accounts - Google isn't directly tapping into that stream - but about who gets to reach people when and where they shop. The applications are conduits for advertising in the form of coupons and loyalty cards. These opportunities are the real reason companies like Google and Visa are pushing to have cellphones replace credit cards.
Sprint Nextel Corp. is collaborating with Google, but the other three national wireless carriers - Verizon Wireless, AT&T Inc. and T-Mobile USA - have formed a joint venture to create their own digital wallet. They, too, are working with Visa, MasterCard, American Express and Discover.
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