Did Google Just Ditch Its Digital Wallet?!?

  • JJ Hornblass
  • November 2, 2012
  • 4

While we were preoccupied with Hurricane Sandy, it seems Google has decided that digital money ain’t all its cracked up to be.

The search engine company cum payments vendor will reportedly introduce a physical payments card to solve its “we are Americans and we don’t tap-and-pay” problem.

From the Android Police blog:

We just had a bomb dropped on us by an anonymous tipster, courtesy of a leaked version of the Google Wallet app – and it was hiding some pretty amazing secrets. Let’s cut to the chase: physical Google Wallet card. That’s happening, and you’ll be able to get one, probably soon.

The physical Google Wallet card will work just like a regular credit card. Whatever your currently selected default card on the Wallet app is, the Wallet card will charge to. It will work anywhere major credit cards are accepted. This is for those scenarios where you don’t have (or want to use) tap and pay. Imagine leaving all your credit cards at home from now on, and just carrying one, and your phone. Sure, it’s not the magical future of using your phone to pay everywhere with a painless tap (let’s face it, tap payments are rarely painless anyway).

Whether this solves Google Wallet’s challenges, we don’t know, but it certainly adds a surprising wrinkle to the payments wars. And Isis responds with …

See more coverage of the Google Wallet card here, here and here.

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JJ started the first iteration of Bank Innovation back in 2007, and has been working on it ever since. He also serves as President & Chief Executive Officer of Royal Media, Bank Innovation’s parent. He founded Royal in 1995 and oversees all aspects of the New York-based diversified media company. Prior to forming Royal, JJ was on the editorial staff of American Banker, the daily newspaper, and worked as an editor of a business magazine in Hong Kong. As a reporter and editor, he has won journalism awards from the National Press Foundation, Newsletter & Electronic Publishers Foundation, and the Reader’s Digest Foundation. He has a BS in Economics from Yeshiva University and a Master’s from the Columbia University Graduate School of Journalism. He was also a Fellow at the University of Wisconsin-Madison Graduate School of Banking. He lives in New York City with his wife, two daughters, and son. He counts among his accomplishments one New York City Marathon, two New York City Triathlons and the 2010 Father’s Day 5K, the first race he ever ran with his daughters. He can be reached at hornblass@gmail.com or 212-564-8972.

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4 thoughts on “Did Google Just Ditch Its Digital Wallet?!?

  1. Keep in mind Google is not and doesn’t see itself as a payments company but rather an advertising company. So if a physical card works better to further that goal than a mobile wallet, makes sense.

  2. JJ,

    The problem with your assumption that this is a replacement for or a failure of the digital wallet, is a lack of understanding of the core value of the Google wallet in the first place. Payments is not and never will be Google Wallet’s differentiation. If you take away Google Wallet’s contactless (or cardless) payments capability, you effectively have Google adwords trying to be Groupon or Living Social, along with a prepaid debit card supplied by Google. A physical card actually destroys the unique value proposition of the messaging layer built into the payments experience because once a customer pulls out the card, modality and behavior dictate that they don’t see any of Google’s valuable messages on the handset, and therefore Google isn’t earning any revenue off messaging anymore.

    This is not, and can never be, a replacement strategy for the wallet – to do so would destroy the future of Google’s entire payments scheme built around the wallet. To equate the adding of a physical card to Google wallet to the ditching of their wallet, would be the equivalent of you suggesting banks should get rid of mag-stripe in favor of returning to checks because mag-stripe isn’t working.

    Clearly Google is trying to supplement the wallet with a mechanism to withdraw cash at ATM machines. Unfortunately I think this is not a well thought out strategy. I believe this undermines the wallet significantly and ultimately will dilute their offering, not add more value. Google needs to stand by the modality of phone-based payments, because once plastic returns to the mix, they loose all value of messaging before, during and after a payment, which is the key differentiation of a digital wallet.


  3. BK –

    Maybe I’m misunderstanding this system, but if I have to look at my phone to tell the piece of plastic I’m about to swipe what I want it to be, am I not opening myself up to the same Google advertising experience?

    It seems to me, and I may be wrong, that this is a play to open up the market (hello, iPhone customers) while NFC lags.


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