Google Wallet
This is the Google Wallet logo, which should not to be confused with the now defunct Google Wave service.
Take Me to Your Leader
Google Wallet is led by Stephanie Tilenius, vice president of commerce and payments at Google. Google poached Tilenius from eBay, where she last served as senior vice president of eBay North America and Global Product. Prior to that, she served as general manager and vice president of PayPal Merchant Services.
Team Effort
Citi and MasterCard are providing credit card and prepaid card services for Google Wallet. Verifone Systems is making the checkout terminals. VIVOtech is supplying the NFC readers. Google hopes additional banks, payment networks, mobile carriers, handset manufacturers, point of sale systems companies and merchants will join the initiative.
Wallet Security
Security of such a service is an essential factor. To wit, Google Wallet requires an app-specific PIN. Initially, all payment card credentials will be encrypted and stored on a chip, called the secure element, which is separate from the Android device memory and is only accessible by authorized programs.
Phone, Chips
Here’s the Sprint Nexus S 4G and NXP secure element chip that fuels secure transactions for Google Wallet.
PayPass
Google Wallet will support MasterCard PayPass, the service that enables consumers to tap to pay. Google Wallet will ultimately be usable at more than 124,000 PayPass merchants in the U.S. and more than 311,000 globally.
SingleTap
Google is also building a SingleTap service that lets shoppers pay for goods using a credit card or gift card, redeem promotions, and earn loyalty points with one tap of their phone. Google is working with VeriFone, Hypercom, Ingenico, VIVOTech and others to develop these point of sale systems. Retailers participating in the new SingleTap experience include American Eagle Outfitters, Bloomingdale’s, Champs Sports, The Container Store, Duane Reade, Einstein Bros. Bagels, Foot Locker, Guess, Jamba Juice, Macy’s, Noah’s Bagels, Peet’s Coffee & Tea, RadioShack, Subway, Toys “R” Us and Walgreens.
A Look
Here is a look at the Wallet app on the Nexus S 4G, with Citi MasterCard support.
Gift Card
Here’s a peek at a MasterCard gift card in action on Wallet.
Google Offers
Google Offers, the local deals service and Groupon rival, also was launched to complement Google Wallet. Whenever a shopper buys or saves an offer, it will automatically sync to Google Wallet. The Google Offers service has been in serious testing in California, New York and Portland, Ore., for a few months.
Revenue from Ads
Everyone wants to know how Google will make money from Wallet. Since Google is not taking a cut of any transaction, it’s going to rely on ads tied to Offers local deals. Google will also take a 50 percent cut from redeemed Offers coupons, which is the standard that Groupon and LivingSocial set.
From Sports Tickets to Restaurant Deals
Offers will range from restaurant deals to event tickets, such as the baseball game offer you see here.
American Eagle Lands
Here is an example of an American Eagle deal from Google Offers.
Saved Offers
Offers are saved and stored in the mobile app on a user’s phone for easy recovery.
Redeeming Value
Here is how a Google Offer is redeemed with the Google Wallet service.
At the Point of Sale
The offer gets redeemed at the point of sale terminal. Here is what the service representative’s screen looks like.
Scanning Coupons
Eventually, users will be able to use the NFC capabilities in their Android phones to scan posters to pick up Google Offers from Macy’s and other providers.