Google launches Google Wallet

Google has released its Google Wallet app, initially on the Sprint Nexus S 4G smartphone.

George Costanza of Seinfeld no longer has to schlep his famously overstuffed wallet. Google today released the Google Wallet app that turns the Sprint Nexus S 4G smartphone into a mobile payment device you can use instead of carrying all those plastic credit cards.

The search giant has been testing Google Wallet since spring. Among its partners: Citi, MasterCard, Sprint, First Data, Visa, Discover and American Express.

Monday's rollout reaches Nexus S phones through an over-the-air update. "We pledged a commitment to an open commerce ecosystem," Google Vice President of Payments Osama Bedier wrote in a blog post.

STORY: Mobile payments gaining traction

For now, the Nexus S is the only phone that can handle the Google Wallet. But Google plans to add the capability to other devices. Google won't say how many Nexus S phones have been sold.

"The limited availability of Google Wallet makes the launch largely symbolic in many respects," writes Greg Sterling in Search Engine Land. "But because of Google's brand clout and visibility mobile payments are now on the radar."

The Wallet exploits short range wireless technology known as Near Field Communications or NFC. Inside the app are virtual replicas of your physical credit cards. At the outset, you can use Google Wallet to pay with a Citi MasterCard and/or a Google Prepaid card, which can be funded with any of your plastic credit cards.

Google is adding $10 to the Prepaid card as a bonus to early Wallet customers.

You can use Google Wallet to make "tap and go" payments at merchants who accept transactions through the MasterCard PayPass Network: There are 140,000 PayPass locations in the U.S. The Wallet app is tied closely to the Google Offers coupon service that promises daily deals and discounts.

Bedier writes, "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 good-bye to even the biggest traditional wallets." To hammer the point home, Bedier's blog post includes a link to a video of Seinfeld's Costanza, aka Google Wallets' "first customer."

Best Buy, Home Depot, McDonald's and Whole Foods are among the merchants likely to accept payments through the Google Wallet. But widespread acceptance is by no means guaranteed. Persuading people who have used plastic to pay for stuff for decades to change their behavior is a daunting task.

And Google faces potentially stiff competition. Some of the biggest names in finance and technology have set their sights on the mobile payments space, including the rival ISIS mobile commerce network that was formed in November among major wireless carriers AT&T, T-Mobile and Verizon Wireless.

Yankee Group senior analyst Nick Holland says for Google the payments business "is kind of the gravy more than anything else. Where the real value is and where Google has an interesting play is in advertising, couponing, location based services and all that stuff."

AT&T, Verizon, T-Mobile To Reportedly Put $100 Million More Into Isis

Look to get more competitive against Google

Back in November, we told you about a joint venture between AT&T and Verizon Wireless (it also includes T-Mobile, which AT&T is trying to acquire) on a mobile payments network. The offering, called Isis, allows users to pay for purchases from their smartphones.

Now, Isis is getting a new injection of funds to the tune of $100 million from the three mobile carriers, as it aims to take on Google Wallet, according to a report from Bloomberg.

“Our mobile commerce network, through relationships with merchants, will provide an enhanced, more convenient, more personalized shopping experience for consumers,” Isis CEO Michael Abbott said back when it was announced.

“While mobile payments will be at the core of our offering, it is only the start,” he said at the time. “We plan to create a mobile wallet that ultimately eliminates the need for consumers to carry cash, credit and debit cards, reward cards, coupons, tickets and transit passes.”

Google introduced Google Wallet in May as an app that turns your phone into your wallet:



“A key benefit to retailers will be the integration of coupons, or offers, into Google Wallet. We’ve been testing a variety of offers – from discounts directly within search ads to check-in offers to offers in Google Places,” said Google Director of Commerce Partnerships, Spencer Spinnell. “Over time, consumers will be able to save each of these offers directly to their Google Wallet. That means consumers will get the benefit of carrying their offers with them at all times, bringing retailers targeted foot traffic.”

With Google trying to acquire Motorola Mobility, it will be quite interesting to see how all of this plays out. Remember that Google Wallet will likely be integrated with Google Offers and Google+.