Tuesday, August 28, 2012

Google Wallet roll out.... without Google Bucks

It's about five years ago that I discovered, by accident and curiosity, that Google Payments Limited had applied for an e-money license at the FSA. Ever since, people have been wondering how Google would enter the payment space. Would they offer a wallet with virtual cards or would they issue their own new virtual worldwide currency (googles, googlets or gees)?

In good tradition, Google started out doing field tests with the wallet (which would sit in the mobile phone) and announced this in May 2011. The wallet was to contain your credit-card cards as well as a google-pre-paid card. And payment was possible with Paypass while the wallet would also facilitate the savings of loyalty-points. The card information was stored in the Secure-SIM-element in the phone and they experimented quite a bit since then.

So where do we stand now?

Well, the Google Wallet is now being rolled out and the Google development team sent out this video to further explain the wallet concept and roll-out. The most important change is that they decided to move the card-information to the cloud. This allows the Wallet to be used both via Phone and via the Web, with all your card details and important digital documents (ID's, transit pass etc) residing in a safe digital environment. So their distribution model for the application is now changing to making APIs available so that merchants and issuers can easily integrate the Wallet in their site/services.

As such, we can thus see Google moving into an integrators role, rather than a payment instrument issuer role. In fact, at some point in time, the company thought about issuing Google Bucks, according to Eric Schmidt, but abandoned the plan. The concept would consist of a “peer-to-peer” money system by which users seamlessly transfer cash to each other via a hypothetical application. However, various laws about currency and money laundering in different parts of the world made this too complicated to realize.

For now, the peer to peer payments in the Google Wallet are no longer on the agenda. And from a historical perspective (see my other blog) I think it is a good choice. Yet.... one of the developers did mention on this subject: it's impossible for now, but stay tuned for some announcements in the future.

So, are we still in for a surprise here?