Google Wallet Doesn’t Need Operators’ OK—And That Could Mean A Fight

Written by Frank Hayes
November 30th, 2011

When it comes to mobile payments, mobile operators may already be losing control of their money-handling dreams—to Google. Tinkerers have now figured out how to run Google Wallet on Samsung’s Galaxy Nexus—an Android phone from Verizon that isn’t supposed to be running Google’s mobile wallet service. Some Verizon users were able to install their own Citi payment-card information in Google Wallet, and even collect the $10 credit for the Google prepaid “card” that comes with the service.

Those tinkerers didn’t actually hack Google Wallet—they just changed settings on the phone to let it run Google’s payment application. And for now, this isn’t something ordinary customers would likely do. But the tinkering did demonstrate that Google doesn’t need a mobile operator’s cooperation to run Wallet on an Android phone. If telcos push back and try to block Google Wallet, that could create a new fight at the POS—with retailers caught in the middle.

The demonstration that Google Wallet can run whether carriers like it or not comes as analysts are beginning to parse how mobile operators, Google and Apple will carve up mobile payments. According to a report last Wednesday (Nov. 23) from ABI Research, mobile operators will control 75 percent of mobile wallets in 2012—that’s a global number, based on what mobile operators have already launched in France, the U.K., Turkey, Korea and elsewhere. But by 2016, ABI figures that Google and Apple will have carved that back to 68 percent worldwide.

In the U.S., the situation is essentially flipped: Google currently owns mobile payments, since it’s already testing Google Wallet in New York, San Francisco and other major cities, while the mobile operators’ joint venture ISIS won’t begin trials in Salt Lake City and Austin until mid-2012. But ABI analyst Mark Beccue warns not to write off ISIS in 2012: “Even if it’s just Austin and Salt Lake City, they will be able to introduce multiple handsets there,” he said. “In contrast, our estimate of current consumers capable of Google Wallet is around 450,000—that’s our estimated number of Google Nexus S users on Sprint.”

Apple, which will likely jump into mobile payments next year, will move tens of millions of payments-capable phones as soon as Apple starts making them for AT&T, Verizon and Sprint.

That makes it sound like a simple numbers game: Whoever collects the most consumers’ phones to be the default mobile wallet will win. But neither Google nor Apple has to wait for mobile operators to cooperate. Apple can (and will) put whatever it likes on iPhones, and telcos will go along with it.

Google is a different story—or at least the ISIS telcos may think it is.


4 Comments | Read Google Wallet Doesn’t Need Operators’ OK—And That Could Mean A Fight

  1. Rich Says:


    You guys REALLY need to enable tweets for these articles. They’re great, and people should be able to share them easily!

    I enjoyed reading it, and I tweeted it anyway (manually).



  2. Evan Schuman Says:

    Editor’s Note: The truth is that we did enable Tweets (and other social media contacts). The app routinely slowed down the page and the stories. Ultimately, to keep the site relatively fast, we had to abandon it.

  3. Jay Gould Says:

    The thing I like the best about Google Wallet is that, unlike many of its competitors, it would allow users to link all of their cards, regardless of brand (Visa, MasterCard, etc.) to their Google Wallet accounts.

    From a consumer’s point of view, the best mobile wallet would store all of our cards, as well as cash and checks. What we would not want to have is a clutter of apps for each individual card type or even each card issuer. So Google is moving in precisely the right direction and I hope the promised future versions will build on that foundation.

  4. Brook Says:

    “—an Android phone from Verizon that isn’t supposed to be running Google’s mobile wallet service”

    I never understand the way people see things at times. This phone is not “from Verizon”. The operating system was written by Google. The hardware was manufactured by Samsung. The reason a person might buy such a device is to run Android software. Verizon is just the service provider that links the device to the telephone backbone and the Internet. Verizon has no right to tell users what software they can or cannot run on their devices. And “Google Wallet” or Verizon’s (vaporware so far) competing product should be treated as just what they are: software. The users should be able to download and install their own choice.


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