While several other companies, including credit card giants Visa and American Express, as well as mobile wireless carriers, have also announced plans to launch their own digital wallets, Google is the first to take its digital wallet to market.
Citibank, MasterCard, and Sprint are the initial launch partners for the service. What this means for users is that, initially, virtually the only credit cards that will work with Google Wallet are Citibank MasterCards. Google is also offering a Google Prepaid MasterCard as well, a workaround for people who may not have a Citibank MasterCard. People who want to use this card can preload money from other credit cards onto the Google prepaid card. And then they can make purchases using the phone.
Sprint is the first official carrier partner since it is the carrier offering the Nexus S 4G. But as other Android smartphones equipped with NFC (near-field communications) technology come on the market, other devices on other carriers will eventually be able to use the service too.
Google also said today that it has licensed NFC technology from other major credit card companies: American Express, Visa, and Discover. This means that upcoming versions of Google Wallet will support those credit cards as well.
"In the future, our goal is to make it possible for you to add all of your payment cards to Google Wallet, so you can say goodbye to even the biggest traditional wallets," said Osama Bedier, vice president of payments at Google.
Google hasn't said how long it will before it expands the Google Wallet offering beyond its initial launch partners. For consumers to load other credit cards, Google will also have work out agreements with various payments that issue the credit cards. John Partridge, president of Visa, said in an interview that it would likely be a matter of months before all the necessary work is completed to put a Visa credit card in Google Wallet.
"What has to happen next is that the banks have to have to agree to give access to their payment credentials," he said. "Those discussions are already under way. But in terms of logistics, I'd say it's a matter of months. Not a long period of time."
Google announced the new virtual payment system in May.
How it works
The way Google Wallet works is simple for users. There is a chip embedded in the phone that uses NFC technology, which allows for secure communication between devices at very short distances.
MasterCard has PayPass terminals at more than 144,000 merchants throughout the country, including in New York City taxi cabs. And Google Wallet should work on all of them. MasterCard has included a free app as part of the Google Wallet experience that helps customers locate PayPass terminals.
