Google Wallet is a great idea - in theory. In practice? The service has been plagued with problems; slow adoption, a lack of NFC devices, the existence of ISIS generally, and a public image crisis after security concerns. The biggest problem, though, has been the decided unwillingness of carriers (except Sprint) to support it.

That's because everyone but Sprint is banking on Isis, which has over $100 million in financial backing from the likes of Verizon, AT&T, and T-Mobile. Isis, if you're not familiar with it, is pretty much Google Wallet sans the whole Google part. But unlike Isis, Google Wallet doesn't provide any financial incentive for network operators. It doesn't take an M.B.A. to see how that strategy is working out for them - the Nexus S 4G and GSM Galaxy Nexus remain the only officially supported Google Wallet handsets.

While money is the root of all evil, a descriptor Google tends to avoid, there's no denying it's also world's most effective lubricant. A report from Bloomberg today claims that Google has had a change of heart, and now is open to negotiating revenue sharing agreements with the likes of Verizon, AT&T, and T-Mobile (and presumably other carriers) on Wallet transactions. Why? The same report claims Wallet adoption has been much slower than anticipated. Really? Google is surprised their only-works-on-one-subsidized-phone-in-the-whole-country mobile payment system isn't gaining traction?

The exact mechanism by which revenue will be shared is apparently not on a per-transaction basis, but rather a commission on users' purchases of Google Offers or use of particular discounts provided by Wallet.

Bloomberg also discusses the fact that Google is considering options to "sidestep" carriers, meaning that the deeper hardware-level integration required for Google Wallet to function and authenticate payments may become optional, instead utilizing Google's own backend systems to authenticate the transaction. Unfortunately, it's fairly apparent that the author discussing this has little idea how Google Wallet works on a technical level, so it's more confusing than anything when they discuss this. It's unclear how Google Wallet would function without hardware-level NFC access without developing an entirely new method of communicating payment credentials.

It is mentioned that the terminals would require hardware or software modification for the "work around" - so it's possible Google is considering a sort of "Wallet Lite" that merely transmits your Google Account information to a payment terminal, which then asks for your Wallet credentials, and then processes the transaction on the terminal. I'm sure VISA loves the sound of that idea, considering Wallet has been pretty buddy-buddy with MasterCard since its launch (though Visa support is supposedly coming).

But at this point, it may be too late for Wallet. Given its very public flogging over the PIN security debacle (justified or not), carrier collusion to avoid its adoption, as well as the efforts of PayPal and VISA to develop their own mobile payment solutions, Google's chance at getting an early foothold in the market seems to have passed. Even with a promise to work with carriers, Wallet has an uphill battle ahead of it, and if we learned anything from Google Checkout, it's that El Goog doesn't have a great history convincing merchants (or consumers) that it should be handling their money.


David Ruddock
David's phone is whatever is currently sitting on his desk. He is an avid writer, and enjoys playing devil's advocate in editorials, and reviewing the latest phones and gadgets. He also doesn't usually write such boring sentences.

  • JoAnn

    Google's problem has always been that despite having roomful's of techies and ad people, they still don't seem to have any grownup businessmen.

    • http://h4r7.me/ Michael H.

      "Grownup businessmen". By that you mean the people who gladly and mercilessly slit throats to make a buck or deal, right?

      • spydie

        I think he meant "men with business experience and a business plan" as opposed to techies who are more into the eye candy.

  • Rob

    Wallet isn't the first time Google has run into a slower-than-anticipated adoption rate. One needs only look at Wave, Buzz and most recently Music.

    While Google's "mad scientists" might be good cooking up the technological wonders they're known for, they really aren't too good a marketing much of anything. We've seen that in the fiasco which was their foray into mobile phone sales and with most of the gems they create.

    While Google+ is ahead of Twitter in overall user volume, it still pales (and probably always will) to the behemoth that is Facebook.

    • http://h4r7.me/ Michael H.

      In Google's Wallet's case, I don't think Marketing is relevant. It's simply not officially available to most people.

      Music is definitely an example of failed marketing, but also an example of how difficult it is to convince a user to leave/transport an already well-established collection of something (music) (even if it's very easy).

    • Ian

      Well, Facebook did have an 8 year head start. The fact that G+ gained any traction is impressive to me.

  • caliber

    I can't understand why Google didn't allow users to just install Wallet on NFC-compatible phones themselves from the Play Store.

    That would seem to be no carrier involvement required, done-deal.

    Instead, they seem to have gone out of their way to block non-Nexus phones from getting Wallet and increasing their marketshare.

    • Rich

      I agree.
      If my SGSII was capable of this, I would use it, now I am losing interest in it.

      • Mesmorino

        I never had much of an interest in it to begin with, it always sounded like yet another google idea that a)wasn't available in my country, b)wasn't available on my phone, c)wasn't even available on that many phones anyway, and d) wasn't even widely available in it's own country.

        • http://h4r7.me/ Michael H.

          Not being interested because it's not available in your country is a bit silly. Inevitably, I'm certain it'll end up in a lot more countries than just the US.

          Not sure what you mean "widely available" in the US, though. There are PayPass locations EVERYWHERE, even where I live (which is pretty much the sticks).

          Phone availability is low due to the newness; more and more phones are shipping with NFC, and with this new effort and willingness on Google's part, it's easy to see how Google Wallet's market share can multiply in just a few months.

    • http://h4r7.me/ Michael H.

      Because they give carriers permission to hide things from the Play Store on their network.

      Carriers could VERY easily demand manufacturers use Amazon's App Store over the Play Store; that is NOT something Google wants.

      • drksilenc

        the carriers would be shooting themselves in the foot doing this.

    • jm

      Carriers have a say in what apps are available to devices on their network through the Play Store. (e.g. tethering apps).

      This runs deeper than just Google Wallet.

    • kevin

      Its not that they're blocking it from non-Nexus phones, its that carriers are blocking the app from their devices' Play Store, because they're supporting Isis.

  • https://twitter.com/#!/psycho_maniac_ Jerry Lange

    google just needs to be the carrier... problem solved!

    • nerdshowandtell

      and make a TRUE nexus phone, made by google (or whoever they contract - but branded by them / supported by them).. no BS.. make it quality and offer it cheap the first round, then get the carriers to play ball once public demand is there.. IE.. take a page from the Apple Playbook..

      • http://h4r7.me/ Michael H.

        Google's Nexus line, when serving as its primary purpose (a developer phone), shouldn't need the most expensive portion of supporting a phone directly, Customer Support.

        It also shouldn't be cheap; most developers don't want a turtle of a phone to test apps, especially heavier ones like games.

        And branding, really? That matters? It's pretty much a guarantee that your case or skin is going to cover that up; to most people, this issue is irrelevant. You can even buy a back cover without any pesky branding on it at all for like $5.

  • spydie

    Money is not "the root of all evil". To make a correct quote it's "For the love of money is the root of all evil".New Testament (1 Timothy 6:10) starts "For the love of money is the root of all evil"

    • Misti.xf

      Depending what/whom you quote. Bible isn't just the one and only source of quotes, ya know?

  • vernon

    why cant wallet work without nfc support? i hve a galaxy note, does it have an nfc chip?

  • Raphael

    The only country this is a problem in (due to the carriers) is America. But the only country Google cares about and lets people use its new products in is America. So it's their own spiteful moronic fault.

  • reala

    The stupid carrier is the problem. We need a dumb carrier minus the ''we subsidized the phone" BS. I don't need insurance, I don't need subsidizing, I don't need bloat ware, I don't need an Indian on the phone trying to explain why my clock is not set rite. I could very well call the manufacture for that. I don't need email offers, NASCAR, TV, Movies, Contracts, caps, tethering fees etc.

    Like imagine if Sprint would put all the money they put into their "NASCAR" presence and put it into their network.

    If I want google wallet why should they be my voice on whether I get it or not.

    I just need a link to retrieve and send data and occasionally phone calls.

  • Freak4Dell

    This is just another situation where Google would have benefited from growing a backbone. Seriously, Google. The carriers and manufacturers depend on you for a crapload of their revenue. Take advantage of that, for once, and demand that things go your way. Even if they refuse to comply, let them see how long they can survive without Android. They'll come crawling back.

  • Kupal

    One good point of this conversation / comments or whatever you may call it, is that "MESMORINO" IS CORRECT!!!! (read mesmorino's msge dated march 21) .. its true google wallet in not yet available in many countries YET, ITS EASIER TO SWIPE A CREDIT CARD RATHER THAN TO 1. GET MY PHONE IN MY POCKET 2. OPEN UP GOOGLE WALLET APP.. 3. ITS MORE CONVENIENT AND SECURED . 4. CREDIT CARD EARNS POINTS WHILE GOOGLE EARS SH*T!!! 5. WHO CARES!!!!!!

  • Dan

    Google's very public flogging over security?  Nope.  Irrelevant.

    1) The overwhelming majority of the public doesn't even know that Google Wallet exists.  They're totally clueless about the fact that Google Wallet had some vague security problem months and months ago that nobody can even explain to them in terms they understand.

    2) Twitter had a security breach.  Facebook had a security breach, and another, and another, and Facebook STILL doesn't secure their cookies so anybody sitting in Starbucks with you can login to your facebook account.  Zappos had a security breach.  Freakin' VERISIGN got hacked back in February.

    Can you really, seriously believe that anybody outside the itsy-bitsy circle of journalists and internet conspiracy theorists cares at all about a problem that Google fixed months ago?