New meaning to "open your wallet"
Google announced this week that it has opened its wallet to consumers, allowing them to associate any debit and credit card with their Google Wallet. It also has eased integration requirements for card issuers wanting to participate in the initiative. With such barriers removed, consumers could now have more ways to make payments from their smart phone using their debit or credit cards. Until now, Citi was the only bank to partner with Google.Under the new program, consumers can link any Visa, MasterCard, American Express or Discover card to a virtual MasterCard account issued by The Bancorp Bank. Although the account is associated with a virtual card (a temporarily assigned, one-time use account number), the customer end user experience is unchanged, as it allows them to use their card directly from the mobile device at the point of sale.
This new move opens the door (technically, the wallet) for consumers and issuers. Will consumers line up to add their cards to the Google Wallet? How quickly will issuers jump on the Google bandwagon? Admittedly, the barrier to entry has been minimized for integration. And with this new configuration, the card issuer (not Google) will still manage any rewards associated with the use of the card.
The modified program is being offered in the cloud, which means card credentials will not be stored on in a secure element on the mobile device but rather remotely in a PCI-compliant database. In addition to this secure way of storing information, Google has also identified a “kill switch” feature which allows the wallet to be disabled if the mobile phone is lost. Earlier this year, Google had security issues with a PIN related access within the mobile wallet on the device. Does this move signal the idea that Google has abandoned the idea of the NFC wallet altogether in favor of the cloud-based offer?
The Google Wallet announcement hopefully gives consumers and card issuers something to consider regarding the ongoing move to mobile payments and mobile commerce. At the end of the day, it moves consumers one step closer to having a mobile wallet option regardless of who issues their card. And it gives issuers the opportunity to think about aligning with Google or consider issuing their own mobile wallet directly.
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