Google Wallet 2.0: One Plastic Card to Rule Them All

Last week the Android Police blog received a tip and some screenshots that showed what Google will soon be unveiling in its ongoing quest to penetrate the payments segment: a plastic card. Google is moving forward by going back.

While it initially seems self-defeating -- Google Wallet is supposed to get rid of plastic -- it is both an innovation to broaden Google Wallet's apppeal and an interim step that now appears necessary in the transition from plastic to true next-generation payments systems.

Google Wallet (the NFC mobile payments tool) remains obscure to most US consumers, although it has been out and operative for well over a year. A plastic card would allow Google to dramatically extend the reach of Wallet without mobile carrier involvement, approvals or the need to do much consumer education. These are the considerable benefits of a plastic card for Google. 

Screen Shot 2012-11-12 at 3.14.02 PM

Image Credit: Android Police

Below are some of the highlights of what was revealed in the screenshots (only a few of which are above): 

  • The Google Wallet Card is designed to be used when/where Google's NFC Wallet won't work or isn't available
  • It promises to work "where major credit cards are accepted"
  • It features the ability to link any card or set of payment cards to Google Wallet and choose on a per-transaction basis which one to pay with
  • Ability to send or withdraw money from a "Wallet Balance" (into a personal bank account or to a peer)

The benefits of the Wallet card being promoted in the third panel above are:

  • The Google Wallet card can act as a substitute for all other plastic cards in your wallet (remains to be seen)
  • Users will have access to unique offers and see them instantly redeemed at the POS
  • If the Wallet Card is lost you just cancel Google Wallet and not all your credit cards

PayPal also has a plastic card, introduced earlier this year. The Google Wallet card is probably modeled pretty directly on PayPal's card and copies many of its key features. It appears, however, there may be some additional features unique to Google Wallet. I'm not sure from the information I've seen and Google is not ready to speak about the product. 

The logic behind Google's new plastic card is clear. Google was caught off guard by carrier resistance or hostility to Google Wallet. Among the major US carriers only Sprint has truly embraced Wallet. While AT&T isn't officially blocking it (Verizon is) the carrier doesn't promote Wallet either.

Most US and European consumers are well versed in plastic payment card culture but they typically have no idea whether their phones carry an NFC chip.

PayPal announced a few months ago that the reach of its plastic card is being dramatically expanded through a deal with Discover and use of the latter's financial network. The Google Wallet information revealed above suggests that Google has or is negotiating a comparable (and perhaps broader) deal with credit card processors. 

As mentioned US consumers have not indicated a burning desire for NFC-powered mobile wallets or the ability to pay with their phones. A Google Wallet card could serve to introduce them to the Google Wallet service, while enabling them to pay in a familiar way: with a plastic card. Over time consumers' willingness to experiment and pay with mobile devices would presumably grow as their comfort with and trust in Google Wallet increased.

A plastic card would also enable Google to completely go around the gatekeeper-carriers and appeal directly to consumers, where its strength lies. 

From a merchant point of view there would be no new infrastructure investment required, as there is with NFC point-of-sale terminals. There are currently about 300,000 NFC enabled terminals in the US.

When I first heard about this Google Wallet card I thought that consumers would be confused and not see a reason to adopt it. But the promise of carrying fewer plastic cards, the security features, potential offers and the ability to manage multiple payment cards in the cloud will be intriguing or appealing to many people.

It's analogous to Google Voice. Google Wallet is essentially being used to "forward" a debit for payment to any account or credit card in the same way Google Voice forwards and routes calls to designated phone numbers. 

Thus for both PayPal and Google it would appear plastic cards are a "necessary evil" on the incremental path to "payments 2.0."