Google Wallet Officially Launched

Earlier this year, Google announced the coming launch of Google Wallet, a smartphone application that turns your phone into a virtual credit card/card-less paying device. Google has been going after the e-commerce portion of the internet aggressively with the recent launches of Google Flights and Google Offers. A couple of hours ago, Google launched Google Wallet.

How does it work?

Merchants accepting these payments from Google Wallet will have this symbol at the cashier:

Google Wallet Payment Symbols

To pay, you simply tap the Google Wallet application on your phone, punch in a 4-digit PIN code to unlock it, and touch the phone to the terminal.  This will send a secure payment, via Near Field Communication (NFC), to the merchant using a Citi MasterCard of a Google Prepaid Card. A Google Prepaid Card is actually a virtual card in which you add monetary funds from any of your existing credit cards. Until the end of 2011, it will be free to add money onto your Google Prepaid Card; however, in 2012 there will be a charge to transfer money.

Google Wallet Mobile Payment System

I have a smartphone, can I use Google Wallet yet?

The answer is: “most likely not”, because you may not have a Sprint Nexus 4G. Google Wallet is being pushed to Sprint Nexus S 4G through a software update. You can sign up to receive updates about releases on your phone version. For iPhone users, Google Wallet for iphones may be available with the iPhone 5 if it includes NFC capabilities.

The advantages of Google Wallet:

For the end users:

According to Google “Because Google Wallet is a mobile app, it will do more than a regular wallet ever could. You’ll be able to store your credit cards, offers, loyalty cards and gift cards, but without the bulk. When you tap to pay, your phone will also automatically redeem offers and earn loyalty points for you“

That sounds incredibly convenient and would mean the end of overflowing wallets.

For the merchants:

Google wants to offer store merchants a fun and easy shopping experience to their customers, with a faster checkout process. Linked with Google Check-in, Google Offers and Google Search History, it also enables marketing opportunity like coupons, mobile ads and loyalty programs.

The “Fake” cons of Google Wallets:

I already hear a few cons to Google Wallet that, in my humble opinion, are not valid:

“Only available in the USA, or to a handful of merchant and retail partners

Although Google Wallet has only been launched today, there are already quite a few places accepting Google Wallet payments, even in Canada. Around 6S Marketing’s office in Vancouver BC, you can shop with Google Wallet at Blenz Coffee, Shoppers Drug Mart, Subway, Tim Hortons, Dairy Queen, and more stores within a 3 block radius. If you want to know where you can use it, either go to “Google Wallet – How it works” or download this Android app (which appears may not be updated frequently, according to reviews).

“Security – Isn’t paying with my phone unsecured?”

Actually it is not. Let’s compare phone payment vs. payment via your wallet:

To unlock my phone, you need to know my password.   To unlock my wallet, you need to figure out how to open a wallet.

To pay with my phone, you need to guess my Google Wallet’s PIN number. To pay with my stolen credit card, you need to learn how to replicate my signature (or not even since most stores don’t require a signature for small purchases).

In both scenarios, I can call my bank and get refunded for the purchases made because the same insurance applies. Google Wallet also sends encrypted payment credentials so the data transfers are safe and secure. When comparing apples to apples, it seems that paying from my phone is more secured than carrying my VISA in my wallet or in a pocket.

Google Wallet official launch

The “real” cons of Google Wallets:

However, there are some real cons that you should be aware of:

Privacy Issues:

Google knows it all. Between the search queries made from your Google profile (phone or desktop), Google Offers, Google location via GPS, Google Check-in, and now Google Wallet, Google knows when, where and how you searched/found a product and when, where and how you purchased it. It definitely opens a debate around privacy issues. Should all your eggs be in the same basket?

However, Google claims that they do not currently receive any data about the product purchased, just the location and time – and this location feature can be turned off in the settings menu.

Extra cost:

After 2011, there will be a charge to add funds onto your Google Prepaid Card. I already pay to have a VISA account, do I want to pay on top of it to use the money from my paid VISA account to another paid visa card?

It’s a prepaid card:

What happens when you forget to bring your plastic credit cards and forgot to add funds to your Google PrePaid Card?

So what do you think? Will you use Google Wallet when available on your phone? Will you trust this method of payment or will you stick to your plastic credit cards? I would love to hear your thoughts.

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