Google Inc. Monday said it has licensed the right to add virtual
“cards” from the three payment networks to its Wallet application.
MasterCard Inc., the other major payment processor, is already part of
the project. The Wallet application Google released Monday, so far, only
works on one Sprint smartphone. The Wallet can be loaded with a
Citibank MasterCard or a prepaid debit card from Google.
With a card in the Wallet, owners can pay in stores by tapping their
phones on wireless-capable payment terminals, instead of swiping credit
cards. There are more than 135,000 such terminals in stores and other
retail locations, but that’s a small fraction of the total number of
terminals.
Google’s vice president of payments, Osama Bedier, couldn’t say when
cards from Visa Inc., American Express Co. and Discover Financial
Services would work with the wallet. In the case of Visa, not only does
Google need to work out the technical details of making its wallet
compatible, it also needs to get the banks that issue the cards to sign
on to the project, like Citigroup Inc. did for its MasterCard.
Google also needs more phones that work with the wallet. Bedier said
Google is working with all major manufacturers of smartphones that run
on Google’s Android software to incorporate chips that communicate with
payment terminals. Samsung Electronics Co. makes the Nexus S phone that
works with the wallet today.
Visa plans to bring out its own, competing mobile wallet application.
The competition isn’t about getting a cut of the money that flows
through the credit card accounts - Google isn’t directly tapping into
that stream - but about who gets to reach people when and where they
shop. The applications are conduits for advertising in the form of
coupons and loyalty cards. These opportunities are the real reason
companies like Google and Visa are pushing to have cellphones replace
credit cards.
Sprint Nextel Corp. is collaborating with Google, but the other three
national wireless carriers - Verizon Wireless, AT&T Inc. and
T-Mobile USA - have formed a joint venture to create their own digital
wallet. They, too, are working with Visa, MasterCard, American Express
and Discover.
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