Google Wallet Application Lets Phone Act as Credit Card

Google announced in a news conference on Thursday its release of a new application that will allow Android smartphones to act as credit cards. The application is called Google Wallet and will integrate credit or debit cards, loyalty cards, gift cards and others into a single application.

How Google Wallet Will Work

According to Google, the application will only work with Android phones from Sprint Nextel that have wireless chips built into them for tap-and-pay. The phones with the near-field-communications (NFC) chips built into them will have a special sticker on them. Older Android phones will be able to have the chip installed.

While Android owners will be able to use the phones in 311,000 stores worldwide that have installed MasterCard terminals, the phones are currently only being offered in New York and San Francisco for now to test the market more accurately.

Application Security and Fraud Concerns

When Google originally announced its plans to release the application in Nov. 2010, concerns about safety emerged. The head of mobile for MasterCard Worldwide, Mung-Ki Woo, assured the public that making payments with the phones will be no less secure than using a regular credit card.

However, one major difference between the phone application and a standard credit card will be battery life. If the phone dies, customers will not be able to make a purchase. The solution MasterCard offers is to make sure the phone is always charged.

PayPal Sues for Intellectual Theft and Betrayal

Shortly after Google announced its new application, eBay-owned PayPal hit the company with a California lawsuit alleging the service is a byproduct of intellectual theft and betrayal.

PayPal is accusing Osama Bedier, who worked for the company for nine years and is now Google’s vice president of payments, of stealing their idea, claiming he was hired by Google four months ago primarily to pick his brain and take PayPal’s trade secrets for its new phone-as-a-wallet service.

Bedier was a part of the team that showed off the Google Wallet service on Thursday.

Google has not yet made a comment about the lawsuit. Spokesman Aaron Zamost said the company won’t respond until it has had more time to review the matter.

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May 30, 2011 • Tags: Card, Credit Card, Google Wallet • Posted in: Credit Cards

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