NEW YORK: Recently, Google made peace with the three major carriers to stop them from effectively blocking its mobile payment app. Smartphone users with T-Mobile, Verizon and AT&T service will finally have the chance to try Google Wallet.
Although the search giant brought out its digital wallet service in 2011, lack of cooperation from carriers prevented it from making as big an impact as Apple Pay has since its October debut. But with the carrier logjam broken, Google’s app will be available to far more consumers, giving it a chance to become a stronger Apple Pay competitor.
Google Wallet’s rough start
Although Apple Pay can be used only on the phone maker’s most recent mobile devices, like iPhone 6 models, Google Wallet can be loaded on both Android and Apple phones. However, only Near Field Communication-enabled Android devices can use Google Wallet’s contactless “tap and pay” functionality. The wireless technology known as NFC lets users make payments by holding the phone near an enabled payment terminal so they can communicate and complete a transaction.
Google Wallet met immediate resistance from the big carriers in 2011, which all backed the Softcard (then called ISIS) mobile payments initiative. The two services were similar enough to be regarded as competitors, though sometimes carriers claimed Google Wallet was blocked for security reasons. Although Sprint and some smaller service providers permitted Google’s system, most consumers haven’t had the chance to try it.
Doors open to Google Wallet
Under an agreement among the four companies, Google Wallet using NFC will be installed on the latest Android phones sold by the three carriers in the U.S. starting later this year, according to Ariel Bardin, Google’s vice president of payments.
“We’re also acquiring some exciting technology and intellectual property from Softcard to make Google Wallet better,” Bardin says. “We’ve been working hard to make the Google Wallet app even more useful to you — and there’s lots more to come.”
No Android payments leader
The move comes just a few months after Apple’s mobile payments service took off, with skyrocketing phone sales. Although Google Wallet can be used on Apple devices (without tap and pay), the search company is making a key play at a time when there is no clear leader in Android payment systems.
“Despite Google Wallet’s numerous pivots and missteps, the acquisition and inevitable sunsetting of Softcard will play a key role in reducing fragmentation in Android, ensuring Google’s consumer reach is greater than ever,” Jordan McKee, a senior analyst at technology consulting firm Yankee Group, said in a Mobile Commerce Daily report. “Lack of operator cooperation has long dogged Google, but with it, expect a stronger and more capable Google Wallet.”
Apple hasn’t released much detail on how many iPhone 6 owners actually use its digital wallet, but reports suggest that the number is in the low millions at least. That isn’t all that much, considering Apple reportedly sold about 74.5 million iPhones during the last three months of 2014, most of them probably Apple Pay capable, while Android makers sold almost 289 million handsets. So there may be a lot of running room for Google Wallet.
