Google adds to wallet

Google Wallet, the mobile payment venture from search engine giant Google Inc., has taken many turns since its May 2011 debut. After security flaws were exposed, Google moved the wallet to the cloud and later abandoned the wallet's prepaid card component. Now Google is making further changes to its high-profile offering: streamlining checkout, linking the wallet to Gmail accounts, and broadening the wallet to include loyalty programs.

At the Google I/O 2013 developers' conference, held May 15 to 17, 2013, in San Francisco, Google launched its Instant Buy Android application programming interface (API). Instant Buy allows Google Wallet users to store their payment information in the wallet and eliminate the need to manually enter billing and shipping information, thereby speeding up the checkout process.

When wallet users make payments, they can use Instant Buy to grant merchants access to their billing, shipping and payment information. "Instead of giving merchants the buyer's actual backing credit card, Google creates and passes a Virtual OneTime Card, a MasterCard-branded virtual prepaid debit card product that can only be used for the specific purchase for which it was issued," said Google on its developer webpage. "Using this card, merchants can process payments with their existing payment processor."

Pay by email

At the developers' conference, Google also unveiled its integration of Gmail with Google Wallet, essentially making Google's email service a person-to-person (P2P) money transfer solution as well. In a May 15 blog post, Google Wallet Product Manager Travis Green said the integration allows users to pay back friends or pay off one's portion of the monthly rent. But Gmail users have to set up Google Wallet accounts in order to make P2P payments, and the P2P functionality is currently available only on desktops, not mobile devices.

Green said Google plans to roll out email generated payments in the coming months. Users who send money via a credit or debit card attached to Google Wallet will be charged a flat fee of 2.9 percent per transaction.

Objects in the wallet

Finally, Google unveiled Google Wallet Objects API at the conference. Google said the new API offers developers tools to integrate loyalty programs with Google Wallet. One of Google's competitors in the digital wallet arena, Apple Inc., already offers loyalty program integration via Passbook.

Google said one benefit of Objects is that merchants can distribute their offers and discounts across other Google properties, including Adwords, the Google Display Network and Google Maps for Mobile. Google has partnered with several loyalty program providers, including Accelitec Inc., Blackhawk Network and Tibco Software Inc.'s Loyalty Lab, to accelerate the integration process.

Google Checkout going away

Following the conclusion of the developers' conference, Google revealed plans on May 20 to retire Google Checkout, an online platform introduced in 2006, and funnel all online payments through Google Wallet. Merchants who use Google Checkout online to facilitate one-step payments with consumers have been given until Nov. 20, 2013, to make the transition to the new platform.

Google said online merchants who use Google Checkout in lieu of traditional payment processors can integrate with one of Google's processor partners: Braintree Payment Solutions LLC, 2ndSite Inc.'s FreshBooks and Shopify Inc.

But will it fly?

Payments industry consultant Paul Martaus applauded Google for its latest efforts, but questioned whether the market is actually ready for digital wallets. "For the most part, consumers haven't quite yet figured out what this is all about," he said, adding that the same holds true for most retailers, with national retailers being the exception at this point.

Even then, Martaus believes digital wallets, in their current state, present a cumbersome payment process with too many steps required, which could force consumers to abandon or avoid them altogether until further progress has been made to simplify payment interactions.

Editorial Note:

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