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Now issuing plastic: Google Wallet Card

As reported by AndroidPolice already two days ago, now user can see for their shelves what Google’s plan for the Google Wallet is: a contactless Card. Yet it is not clear how this will work in detail and why Google is doing this, but lets look behind the curtain, to see what options there are.

Google’s big advantage in the NFC ecosystem is, that they have an embedded secure element in each NFC enabled mobile devices. Now, as ISIS starts in the US this solution is getting a competitor. The MNOs want to see the UICC as the (only) secure element and therefore does Google not allow (thru legal agreements) installing a wallet in the secure element. This also might be also the case for Europe, where the MNOs have a strong customer relation ship. As long as no MNO wants Google on its device, Google will not be present. So far, MNOs in Europe are seeking their own solutions with their own wallets. This reduces the impact of Google Wallet massively, as the MNO projects are long lasting a yet far away from market implementation.

So what is Google doing? The start collecting different types of payment cards from the customers such as debit and credit cards, which can be used for card-not-present transactions. Similar to PayPal Google then is able to use this payment instruments for POS payment, online payment or payment at Google Checkout. The idea of virtualizing the card in an NFC phone started in August, when Google allowed storing different existing cards in their wallet for POS payment. Google didn’t issue one virtual card, for each physical one. There was only one card in the secure element and the routing from which account/card the money was taking as in the backend system of the issuer: Bancorp Bank. So Google’s Wallet in this case is just a user interface that allows the customer to „redirect“ the payment flow to the correct card.

When issuing a physical Google Wallet card, the idea stays the same. One the card the is only one payment application (I’m quite sure, it is a MasterCard PayPass, issued by Bancorp. Bank). It is not a post-paid or prepaid card, it is a virtual card that redirects the payment flow to an account the customers selects thru its Google Wallet. This implementation allows even „non“-NFC or „non“-Google Phone users to use the Google Wallet. They will receive a card and they only thing they need is an application, which allows them to select to „real“ card behind this virtual card. This all is done in the backend, why it is often referred to as could payment. The application could run on any phone – even iPhone.

PayPal already took a similar approach with the PayPal debit card, but in this case only the amount store could be retried at an ATM. existing payment instruments were not touched. Google does not store/hold money, it simply only acts as a router and therefore requires less infrastructure and investement (and no Bank licence).

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