Google Wallet is a real thing now—here comes the competition

Good for Google Wallet, getting every major credit card to play along. Now comes the tough part.

Google announced an update for Google Wallet yesterday, but that’s like saying you announced an update for your life after having your first kid. Google’s pay-with-your-phone experiment has actually just picked up a huge advantage and become a seriously feasible commerce tool, but only if Google can get the word out fast enough.

Google Wallet uses near field communication, or NFC, to automatically connect newer phones with NFC chips to payment pads at certain partner stores, or wherever MasterCard has its PayPass system. It’s kind of neat and future-ish to tap your phone where you’d normally swipe a credit card, almost like you’re taunting the magnetic technology of old. Sure, the cashier more often than not gives you a look akin to, “Oh, this person wants to pay all fancy,” but it does work--kind of.

“Kind of,” because up until now, you had to use a Citi-branded credit or debit card to use Google Wallet, or load up a prepaid Google debit card with funds. Those options stink. Now, however, you can use any major credit card with Wallet: Visa, MasterCard, Discover, or American Express. That means you can use your actual credit cards and real bank debit cards by bringing your phone near PayPass/Wallet stand. You can now use Google Wallet like a wallet.

At first, it’s just going to be mundane stuff, like paying for gas, or McDonald’s, because that’s who has PayPass kiosks installed. But you’re eventually going to see more retail chains pick up mobile-friendly registers, as they replace their older swipe machines. And Google, for once, is out front and has some consensus from major players with one of its initiatives. As NFC works its way into mainstream phones, while PayPass/Wallet concurrently gains adoption among retailers, you’re going to see more people in front of you in line using their phones to pay.

The danger for Google, though, is being a first mover that points out the road ahead without getting enough of a lead. Apple will ship a “Passbook” in iOS 6, intended at first as a rewards/store card gathering tool, but you could see a transition to credit/debit cards down the road. But that’s just the technology side. On the commerce and price side, Wallet could find itself in the same situation as innovative mobile payment system Square, currently being fought tooth and nail on percentages and merchant perks by competing services from Intuit, PayPal, and the credit card firms themselves. Once someone proves that customers and merchants will work with a system, it leaves room for others to try and offer a smoother, cheaper system.

In the meantime, I’m loading up my credit cards on Wallet (without too much worry, because you can easily disable your Wallet from any browser) and eager to buy some chips and gas. After that, who knows? Maybe a Five Guys burger and fries. I’m eager to reduce my daily “Wallet, keys, phone” check down to “Keys, Phone-which-is-my-wallet.”

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