Google is rebooting Google Wallet to enhance its functionality and deal with some chronic issues it has had with credit card issuers.
Today, the company announced the release of several of those expected upgrades.
The most notable change to Google Wallet is that its users now have the ability to use any credit or debit card, regardless of card issuer or brand, to fund both online and offline purchases on the wallet. Additionally, card data will be stored in the cloud instead of on a phone’s secure element.
Google also released a solution to deactivate Google Wallet in a lost or stolen phone.
In a post on the Google Commerce blog, Robin Dua, head of product management for Google Wallet, explained that saving any card to the Google Wallet is as simple as entering the number into a mobile app, online wallet, or Google Play when making an online purchase using Google Wallet. In-store purchases using NFC at the point of sale can also use the Google Wallet in conjunction with a selected credit or debit card for purchases.
After making a payment, Dua said, shoppers will see a transaction record on the phone with the merchant name and dollar amount or they can view a history of all in-store and online purchases from the online wallet.
Fixing issuer issues
When it was launched last year, Google Wallet partnered with card issuer Citi to provide a prepaid MasterCard account that resided within the wallet. But other credit card issuers were reluctant to sign on as partners. As a source said in our original report, a lot of issuers were wary of committing to the necessary effort to partner with Google Wallet without evidence of ample upside for enabling NFC payments.
The new cloud-based approach solves that problem by taking the issuer out of the mix. Instead of the credit card issuer’s card number residing on the phone’s SE, a virtual card number is stored there. (Google calls it a “wallet ID,” but it’s actually a prepaid MasterCard account. More on that below.) That’s a big switch from the way the Google Wallet was originally designed.
“To support all credit and debit cards, we changed our technical approach to storing payment cards,” Dua said in her post. “The Google Wallet app now stores your payment cards on highly secure Google servers, instead of in the secure storage area on your phone.”
It’s the wallet-ID/prepaid-MasterCard that is transmitted to the point of sale terminal using NFC to make a transaction happen. And when that transaction happens, it happens in real time; Google instantly charges the associated credit or debit account for the purchase. The purchase then shows up on the phone and can be reviewed online or on the mobile device through the Google Wallet account.
Along with making it easier for consumers to use their mobile wallet, the new setup benefits card issuers looking to make their cards available for inclusion in the Google Wallet as well.
“This new approach speeds up the integration process for banks so they can add their cards to the Wallet app in just a few weeks,” Dua said.
Mastering the possibilities
As mentioned, the Wallet ID stored in the mobile devices Secure Element is actually a virtual prepaid account from MasterCard.
The prepaid account is issued by The Bancorp Bank, a banking partner with Google Wallet.
When a consumer makes a purchase at a brick-and-mortar merchant, it’s the virtual account number that gets passed to the merchant and not the consumer’s card data. Those transactions will then show up on the statements for the linked account as “Google” followed by the merchant’s name.
“This is a win for consumers because they can use their favorite credit or debit card when making a purchase using the virtual prepaid MasterCard,” said Mung Ki Woo, group executive for mobile at MasterCard, on the company’s blog. “It’s a win for issuers because they have another way for their cardholders to initiate transactions.”
Woo said MasterCard, one of the original partners on Google Wallet, thinks the new cloud-based option will increase the appeal of the Google Wallet, by making it more convenient for consumers with any card issued by any U.S. bank to enjoy the speed and convenience of contactless mobile payments “We expect to see a lot of new customers signing up for the program, linking a — and tapping at PayPass terminals across the U.S.,” Woo said.
Putting a Wallet on lockdown
Along with the new cloud-based approach, Google Wallet also released a new security feature that lets users remotely disable a mobile wallet on a lost or stolen phone.
Google Wallet has always featured a dedicated screen lock, but now users can visit the ‘Devices’ section in their online wallet account and simply disable the mobile wallet on any connected device. After that, the wallet cannot be used to authorize transactions. It will also reset that mobile wallet and wipe it of card and transaction data.
The new Google Wallet is already available on Google Play for NFC-enabled phones with secure elements. Available phones include the new Samsung Galaxy SIII and the new Nexus 7 tablet