Google Mobile Chief Bedier Issues a Teaser About a New Wallet Version to Come Soon

Google Inc. will launch yet another new version of its mobile wallet in about a month, Google’s top executive for the product said on Monday. The latest version, which Osama Bedier, vice president of  Google Wallet and payments, referred to as “the 2.0 version” of the product, comes just short of three months after it unveiled a thorough-going overhaul of the wallet it originally introduced in May 2011.

Speaking at Money2020, a trade show in Las Vegas focused on mobile payments, Bedier referred to the upcoming new version but gave no details. “In the next month, we’ll launch a new way to experience Google Wallet that builds on a lot of the lessons I shared with you today,” Bedier said. He added later that Google is “putting the finishing touches” on the new version, and has added a line at the top of its Google Wallet page asking visitors to “request an invite.”

Interestingly, the page asks visitors to specifiy the mobile operating system they use and displays as one of the choices an Apple Inc. iPhone, implying that the new wallet may work with the device. Up to now, the wallet has worked only on a limited range of smart phones that use Google's Android software. The iPhone does not support near-field communication (NFC), so some other triggering mechanism would be necessary to initiate transactions if Google does indeed embrace the iPhone. Also, Google would have to seek permission from Apple to include its wallet app on Apple's app store.

Bedier’s teaser about the new product comes on the same day that the rival Isis mobile-payments venture launched its service in Austin, Texas, and Salt Lake City. Isis, a joint venture of the country’s three largest mobile carriers, was originally set to launch early this summer but has experienced several delays.

In his speech and in a question-and-answer session afterwards, Bedier referred to the importance of using mobile technology to allow merchants to recognize frequent customers when they walk in the store, to deliver product information and offers to those customers, and to help customers find the merchandise they’re looking for. The payment transaction itself, he said, can’t be the focus of mobile commerce, since current card technology works well for that purpose. He also stressed the importance of what he called “ubiquity,” or the inclusion of all or nearly all merchants in a wallet network.

He waited until the end of his speech, however, to refer to version 2.0 of Google Wallet, and then abruptly ended his talk. The version introduced in early August, which Bedier referred to as “version 1.5,” represented a radical break with the original product’s dependence on NFC embedded in the handset. Version 1.5 retained NFC for identification of the device to the merchant terminal, but moved payment credentials from a secure element inside the phone to Google servers in a so-called cloud configuration.

Bedier hinted that this approach, which allows consumers to save cards from any issuer to the wallet without the need for Google to have prior agreements with the issuer, won’t change with the new version. “NFC is not our strategy, it’s part of our strategy,” Bedier said during the Q&A. “We’ve learned a lot about the shortcomings of NFC and solved for that by connecting to the cloud. Stay tuned for other parts of our strategy.” Isis, for example, retains a pure NFC setup, storing credentials on the phone’s SIM card, which acts as the secure element.

The new cloud-based approach, however, has created some problems for Google. Shortly after Google announced it, American Express Co. objected that it had not given consent for its cardholders to load their cards to the wallet. Also, as part of the new cloud approach, Google included a virtual prepaid MasterCard in a chip in the phone. The virtual card performs the actual transaction with the merchant, with Google then settling with the issuer of the card stored in the cloud. NFC Times recently reported that Visa Inc. has objected to this approach, fearing that it could dilute the value of its brand as an acceptance mark.

While Bedier remained mum about the upcoming announcement, he expressed some humility about Google’s experience so far in fashioning a mobile wallet that pleases consumers, merchants, and mobile operators. Asked about possible international expansion, he said Google will likely keep the product in the U.S. for the foreseeable future. “We need to figure out the wallet first,” he said. “We’ve got to get it right first.”