What is Google Wallet?

With the arrival of another in the long line of services from the Big G, today’s tech-savvy man on the street is left with the burning question, what is Google Wallet? Naturally, we at Pocket-lint wouldn’t want our readers to spend their time sifting through the small print with a magnifying glass, so we’ve done it for you.

This is all there is to know about Google Wallet for now and the first thing to note, just in case you haven’t guessed, is that it’s only available in the US. Still, when it comes to the security of your money, it might be best to let some other people deal with the teething problems first.

What is it?

Let’s start with the basics. Google Wallet is an app; an Android app to be precise. It’s a free download and, once you open it up, you can add the details of your credit cards so that it stores all the basics that you need to make payments - presumably the long number, expiry date, name as it appears and CCV but we’ll have to wait and see for those kinds of details.

Now that your Google Wallet app has your card details, it has everything it needs to make payments without you having to reach into your actual, hard, leather, real life wallet and dig out your cards.

The next trick is getting that information across to a payment system which is provided as a contactless payment terminal that the merchant should have sitting at their check outs. Obviously, it’s no use having a magnetic strip reader because Google Wallet has no magnetic strip. Instead, it’s an NFC-enabled device which will communicate with the NFC chip in your smartphone. Payment details go from one to the other via the amount to be debited and, hey presto, your account is charged and the items sold. Job done.

Is that all?

No, sir. As well as normal credit and debit cards, Google Wallet can deal with store cards, loyalty schemes, gift cards and maybe in the future all sorts of exciting things like boarding passes, tickets and receipts as well.

There’s also the matter of a service known as Google Offers which will be starting up in an area nowhere near you shortly. Google Offers will be for both online and local deals in a rather similar way to which Groupon currently works. The added push is that anything you purchase via Offers will automatically sync with your Google Wallet. Once at the store in question, you’ll be able to present the barcode on your screen for the sale staff to scan or complete the transaction via NFC if they happen to be fitted with a reader.

Will it work with my cards?

Well, yes and no. First, of course, there’s the issue of having to be in America, for the time being. Beyond that, the card support that Google Wallet will launch with is Citi MasterCard. So unless you have one of those, there’s no direct support. Indeed, even if you have a Citi MasterCard, your account might not be compatible, so take a look over at the company website to check. Of course, if you’d like to apply for a card, then you can go and do that as well - provided you’re not on the credit black list that you probably are.

Google has said that it’s looking to support all cards from all suppliers in the future but, until then, you do have another option - the Google Prepaid Card. The GPC is a virtual credit card which is something that you can top up from funds elsewhere including other credit cards. That then serves as a source of cash with which to make your Google Wallet payments. In fact, so keen is Google for you to use this system, that the company will actually offer you your first $10 for free.

Where can I use Google Wallet?

America, is the short answer, with over 124,000 merchants using the MasterCard PayPass NFC terminals currently required for the task. Within that number, you’ll find those who'll process the payments as well as supply the full Google Wallet benefits of loyalty points schemes and voucher redemption, and those who are just enabled to take the payments alone. The former are known as Google SingleTap merchants and include the likes of Bloomingdales, Macys, Subway and all sorts of other big names. Jack in the Box and Coca-Cola et al will do the tap and pay only.

If you’d like to find out your nearest PayPass and Google Wallet-ready locations, then you can enter your zip code in the GW site. You can also use the PayPass locater Android app to take a butchers while you’re out and about. Finally, it’s also worth keeping your eyes open at the check out. Spot the PayPass symbol and you’re in luck.

Can I use it on my phone?

Probably not. There’s a fairly specific subset of people who’ll be able to use Google Wallet at launch. You have to have the Google Nexus S 4G on the Sprint network. Naturally, Google will be extending that set in time, so you might want to consider NFC as something to have in your next handset. At the moment phones with NFC technology embedded include:

Nokia C7-00, 6212 Classic, 6131 NFC, 6680; Samsung Tocco Lite, SGH-X700 NFC, D500E, Wave 578; LG 600V, Motorola L7, Google Nexus S and BlackBerry Bold 9900/9930.

Because each transaction is done via NFC, there is no network connectivity required to make a purchase.

Security

Security and consumer trust are obviously going to be massive issues if Google Wallet is to succeed. As such, Google has done its best to put users at rest by outlining how safe the system’s going to be with your money.

Once entered into the app, all your card details are encrypted and stored on a separate chip within your handset known reassuringly as the Secure Element. The Secure Element apparently can be thought of as a distinct computer capable of running its own programs and storing its own data. It uses storage separate from the normal Android memory and will allow trusted programs to access your information.

Once the information leaves your handset via the NFC connection, it's looked after by MasterCard’s PayPass security which presumably has a little more experience on the street under its belt.

On top of all of that, the Google Wallet app also requires users to enter a PIN each time a transaction is made and, just to make sure there’s as little damage potential as possible, each Google Wallet transaction is currently limited to just $100. You can spend more but it requires an activation code being sent to your handset.

Should all else fail, the consumer will find themselves with the same rights and liability as if it were a normal credit card.

Charges

Google takes no cut of each sale nor does it charge the merchant nor the bank or card issuer when Google Wallet payments over NFC are paid. There’s also no fee to the user when topping up the Google Payment Card - at least until the end of 2011.

Problems

The first big issue is over the PIN. If one has to enter a PIN each time one makes a transaction, doesn’t that rather ruin the whole one tap experience? In fact, it doesn’t sound much better than using a chip and pin card system.

Also, Google has posted a slightly disturbing phrase on the Google Wallet site over data issues. It reads:

“Google Wallet does not currently receive data about what products you purchase with it,” and it’s the “currently” that’s a wee bit alarming.

Does this mean that Google Wallet might well change that policy in the future? And, when it does so, will this be in done in a semi-visible app upgrade moment where nobody realises what it is that they’re OKing? Who knows. It might be nothing at all, but definitely something to keep your eyes on.

The system clearly has the power to do it but, for the moment, all Google Wallet will record, and record locally, is the time that each transaction is made. You’re also welcome to set it to keep a note of the location too.

When’s it coming

“Coming soon” is the phrase Google has used, so no one really knows just yet. The next two or three months is a likely timescale. Beyond that and there might be another Nexus device on the way which the Big G could have gone with instead.

Interested in signing up or just way too much power for Google?