Google Wallet: A utopian ideal that isn’t ready for prime time

• By Sebastian Anthony on September 20, 2011 at 3:50 pm
• 4 Comments

Share This Article

Almost every aspect of Google Wallet — which launched in the US today — sounds utterly awesome: No more bulky wallet; one device to rule them all! Increased security! Contactless payments! All you need is aGoogle Nexus S smartphone, with its fancy NFC chip, and that’s it: a paperless utopia awaits.

Only… it isn’t quite that simple. It’s impossible to understate how amazing it would be if smartphones replaced tickets, receipts, coupons, gift cards, credit cards, and just about every single-state, plastic and paper recording medium — but on the flip side, the number of roadblocks and ramifications that encumber such a roll-out are so, so numerous.

Starting at the top, it’s important to note that the smartphone actually plays a very, very small part in the grand scheme of Google Wallet; it is almost entirely about the NFC chip in the phone, and the contactless point of sale that can read the NFC chip. You could take the NFC chip out of the Nexus S, embed it in a plastic card, and it would still work — and in fact, that’s exactly what the London Underground Oyster card does. The only difference is that you can’t interact with the card’s “contents” (the money balance) without a standalone Oyster card reader; with the Nexus S, you could top up your card via your phone.

Oyster card, to put things into perspective, has been providing contactless payments since 2003 — and yet for some reason, the technology has never really expanded beyond this niche. You can even store the details of multiple credit cards on a single NFC-enabled token — you could combine a rail ticket with your Visa credit card — but… it just hasn’t happened. Why?

It’s certainly true that Google Wallet certainly makes it easier to manage the contents of your digital wallet, but really that’s beyond the point: you want payments to be as smooth as possible, and Google Wallet doesn’t offer any more convenience than an NFC-enabled credit card — and indeed, Google Wallet is piggybacking on MasterCard’s PayPass contactless point-of-sales, a system that is old as Oyster card (implemented in 2003!) but only now, almost exclusively in the US, is it reaching critical mass.

What is special about Google Wallet, then? What about it is unique? Why will it encourage millions of vendors around the world to upgrade their card readers — especially in places like the UK where they have only just upgraded to chip-and-PIN systems?

It’s not as if Google Wallet is inherently faster than a NFC-enabled credit card; if anything, it is slower. With Google Wallet you have to pull all five inches of it out of your pocket, unlock your phone, open the Wallet app, type another PIN, and then swipe to pay; with a contactless card, you just swipe — and as we’ve already covered, it’s possible for a single card to contain multiple accounts, so it’s not like Wallet wins in the “rifling through your wallet to find the right card” stakes. Even with chip-and-PIN, the number of steps to pay is less; and slotting a card into a hole isn’t exactly hard.

Then there’s security: with a PayPass credit card, you have to enter your PIN if the transaction value is over a certain threshold ($50 usually). With Google Wallet, no matter the value of the transaction (even for a cup of coffee), you need to unlock the phone (which 67% of users don’t password protect), get past the Google Wallet PIN — and voila, you have access to every credit card, voucher, and ticket on the phone. The Google Wallet PIN is just four digits, though, and do you really want all of your money and credentials to be protected by a four-digit number? At least with credit cards you have the choice of using different PINs, and you can leave the house with just one card if you like — but Google Wallet (running on a $800 smartphone!) is a mighty valuable single point of failure.

Finally, there’s the biggest issue of all: unlike contactless credit cards, Google Wallet, by virtue of its smartphone provenance, requires a metric ton of battery power. Have you ever forgotten to charge your phone the night before and ended up with a beautiful, shiny brick come noon? It’s annoying, but not the end of the world. Now imagine if your smartphone also stores your rail ticket home, your pass key to log onto your computer, and your Starbucks card.

The world is certainly ready for paperless, contactless cards and coupons, but Google Wallet isn’t significantly faster, safer, or more convenient than existing options.

Read more at Google Wallet or watch the demo video below
http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" classid="clsid:d27cdb6e-ae6d-11cf-96b8-444553540000" width="640">