Tired of Carrying Around Your Wallet? Google May Have a Solution

On May 26, 2011, Google (along with Citi, Mastercard, First Data and Sprint) gave a demo of the new Google Wallet. According to Google, the vision behind this product is based on an open commerce ecosystem. It is designed to not only hold the credit card information you keep your wallet today, but also eventually synch your loyalty cards, gift cards, receipts, boarding passes, and more. The technology works by storing virtual versions of your cards in your phone. When you are ready to pay and redeem offers, you would simply swipe your phone wirelessly by a reader like PayPass.

Of course, this technology also immediately brings to mind questions of security. Is it safe to store your financial information in your phone, and is merely swiping your phone by a reader secure? Google insists that it is. They will require users to set up a Google Wallet PIN before making a purchase. The user’s card information will be encrypted on the phone onto a secure chip. The chip is designed to only allow trusted programs to access the payment credentials that are stored on the chip. This provides a higher level of security than just having a physical card in your wallet. However, if you lose your phone, Google advises you should still treat it like a lost wallet—meaning, you must call all of your banks to cancel all of the cards you stored in your phone. If you store a lot of cards on your phone, this could be time consuming. Additionally, the wallet application won’t be available to everyone: Google Wallet is an Android application, so it can only be used on an Android phone.

The Google Wallet is currently undergoing field testing and there are plans to release it to the general public soon, although there is no date currently set. To complicate things, soon after Google announced the Google Wallet, PayPal announced plans of a lawsuit, alleging that Google stole its idea for a digital wallet. However, regardless of how this lawsuit turns out, we can be sure we will soon see one form or another of a digital wallet on the marketplace, whether it will be from Google, PayPal, or elsewhere. It’s a good idea to start familiarizing yourself with the technology now, so you can be ahead of the curve.