Google Wallet Not Ready for Prime Time

Simplification is usually a good choice for finances whenever it is available, and the bulky wallet is due for a technological upgrade, simplifying back pockets of men’s jeans everywhere. I’ve received the occasional comment about my “George Costanza” wallet; as I collect receipts from my day-to-day transactions, the leather becomes increasingly distended. Google’s first in the United States on the train towards eliminating this particular bulge and lightening the load for those who carry cards and money in bags. In fact, Google re-purposed a clip from Seinfeld to tease the public about this forthcoming technology.

In Europe, this technology already exists, even if it isn’t ubiquitous yet: your mobile phone will be able to function as a payment mechanism with merchants who accept credit cards. New mobile phones will include a chip that securely transmits a credit card number of choice to a cashier’s receiver. Just like the PayPass or other credit card technologies that allow you to wave your plastic like a Jedi to pay for your groceries, cell phones carrying digital wallet applications will theoretically take the place of your bulky, card-filled wallet.

Despite strong marketing from Google and other companies getting ready to launch digital wallet services, there are still some barriers to this technology.

• Most phones do not contain the NFC (near-field communication) chip that makes secure wireless communication between the phone and a retailer’s receiver possible. In fact, the Google Nexus S is the only phone in the United States that contains this technology as of today.
• The Google Nexus S is only available on Sprint. Consumers who want to take advantage of this technology right away would need to leave Verizon Wireless or AT&T.
• Not all credit card companies are on board. Google Wallet is launching with help from Citi and MasterCard. Visa, American Express, and Discover will operate with slightly different technologies. They’ve made the details available to programmers, though, and the issuers may be included in future versions of Google Wallet, or they will sponsor their own, competing applications.
• Many people are still skeptical of security. I’ve often maintained that secure digital communication is more secure than handing your credit card to a waiter who disappears for five minutes, but there is a mistrust of credit card databases stored by financial companies. In order to use technology like this, you provide your credit card information to yet another third party.
• With more of your financial information in the hands of others, you are open for more and better-targeted advertisements and unsolicited offers. Using a digital wallet will certainly require your agreement with a document outlining terms of use, and that document will undoubtedly reduce your rights to privacy. Your credit cards know where you spend your money and how much. Do you also want Google to know?
• This service may replace your cash and credit cards, but that’s only part of your wallet. You may use your wallet to hold your identification and driver’s license, your health insurance identification card, your roadside assistance card, your mass transportation access card, your office security key, and your casino player’s club card, just to name a few. Some of these may be supported by Google Wallet and similar applications in the future, but some won’t.
• Until all merchants accept wireless transactions, you’ll still need to carry your credit and debit cards. In fact, even if a merchant accepts NFC payments, if the technology is a little old, it won’t accept payments from cell phones.
• My cell phone’s battery is generally dead by the end of the day. Without a wallet and without a back-up battery, how will you pay for an item with a phone that won’t turn on?

If you’re an early adopter of technology, feel free to jump on the bandwagon. Google Wallet is not quite ready for mass consumption.