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Google Wallet Creators Reflect On Its Failures, Lessons

Former top product leads for Google Wallet offer a frank assessment of what went wrong with Google's payment service.

In 2011, when Google first introduced Google Wallet, the company heralded its mobile payments product as a revolution in e-commerce. Google payments VP Osama Bedier called it "one of the biggest investments" the company had ever made; executives from partner companies Mastercard and Sprint described how it was finally "moving [us] beyond" plastic; and media outlets praised the service as "the future" and "tomorrow's billfold."

But after two years on the market, Google Wallet has made little to no progress in replacing paper cash, plastic cards, and leather wallets. Despite hundreds of millions of dollars of investment, the Wallet app has seen a paltry amount of downloads for a company of Google's scale, and Bedier has since left the company. Bloomberg Businessweek recently reported that Google Wallet is "leaking money" and that "it’s reconsidering or has abandoned projects designed to broaden Wallet’s appeal." What went wrong? Jonathan Wall, the founding engineer of Google Wallet, puts it bluntly: "With Google Wallet, we had one point of failure—the carriers."

Image: Flickr user Sean Narvasa

It's a refreshing admission from one of the original creators of Google Wallet, who once optimistically called the product the beginning of a "great adventure towards the future of mobile shopping." Indeed, Wall cowrote the original Wallet announcement in mid-2011 in a blog post, where he described the promise of Wallet. Integrated on a select set of Android smartphones, the Wallet app, which took advantage of NFC technology, enabled users to store their credit cards digitally on their mobile devices and use them to wirelessly make in-store payments. At Walgreens, for example, customers could simply grab and swipe or tap their phones at the register to buy goods instead of having to reach for a wallet.

In the beginning, many, especially on the Wallet team, were hopeful that Google could pull it off because of its ubiquity in mobile. "Very early on, as we got started, it was very exciting and people were very interested in the potential of the product," Wall says. "We did bet on NFC; we did bet on new hardware; and at the time, it felt like we could use the leverage of Android against the problem. We thought, Maybe it is realistic."

But even critics bullish on the technology were certain to note that the product was a long shot. The service was too dependent on a string of outside players, including the merchants, the phone makers, the credit-card companies, and most dangerously, the carriers. When the Wallet app rolled out, it was initially only available on the Nexus S 4G from Sprint, but Wall and his cofounder Rob von Behren promised that "over time, we plan on expanding support to more phones."

Reflecting on how that plan went awry, Wall explains, "Ultimately, the carriers perceived this to be their opportunity and use the necessity of hardware to really block the product." Sprint remains the only major U.S. carrier to support the service; AT&T, T-Mobile, and Verizon have instead decided to support Isis, a competing mobile payments service, effectively denying their customers access to Google Wallet (or vice versa).

Ironically, Wall isn't even that interested in mobile payments any longer, calling payments "the least important and least interesting part of a transaction."

"It's an entire industry built on charging small, infinitesimal tolls," he explains. "Everyone says, 'Well, if I can just use my current position to get into the role of erecting my own toll booth, wouldn't that be a great business?'"

Wall, along with Marc Freed-Finnegan, the former product lead of Google Wallet, left Google to start Index, a startup focused on in-store retail and customer data, which is backed by Google executive chairman Eric Schmidt. Freed-Finnegan says payments aren't even much of a pain point, calling Coin, the novel Bluetooth-enabled card unveiled last week, "a slick solution," but not terribly transformative or even necessary.

"Payments work pretty well today—I take out my card and I swipe it—it's pretty fast and easy," he says—a surprising revelation given that he and Wall spent years working on Google's Wallet project.

When I ask whether Google Wallet can be salvaged, the two seem slightly hesitant to prognosticate. "Everything payments related at Google has now been branded Google Wallet—there are a lot of things going on there," Freed-Finnegan says.

Wall is a bit more forthcoming. "Very early with Google Wallet, we saw the opportunity of using data to improve things for retailers and for Google," he says. "We set off to build Google Wallet, but along the way, a lot of leadership got brought on board that had a different view of things. They were maybe more interested in the payment than we were."

[Lights: Janna Golovacheva via Shutterstock]

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  • Freedom Supreme

    Blaming their failure on the carriers and categorizing payment as the least interesting part of the transaction highlights how clueless the Google Wallet team was. No wonder it has been a disaster.

  • dmgerbino

    My smartphone is the Moto X by Motorola. My carrier is Verizon. My phone has NFC. I use the Skip device to unlock my phone via NFC. It is very cool. I have a Google Wallet account. Many of my payment cards are loaded into the wallet. I use my wallet account to buy apps, music and books from the Google Play store. I even use it to make an occasional P2P payment. After my phone was upgraded to the latest version of Android, 4.4 or Kit Kat, the Google Wallet app on my phone was upgraded to allow tap and pay. Tonight I went to CVS, a large pharmacy chain, to buy a few items. All my loyalty cards are stored in my Key Ring app. I opened my Key Ring app and pulled up my CVS loyalty card so the guy behind the counter could scan it. After he was done totaling my order I tapped my phone to the POS device, it beep, I signed my name and the cashier said enthusiastically "How do you do that?" I said Google Wallet.

    Please note. In order to use my loyalty app, I have to either unlock my phone or touch it to my skip device on my belt loop, launch the loyalty app and select the card I need. Is this worth it to me? Yes. I have 15 loyalty cards and I do not want them inn my wallet or on my key chain. In order for the Google Wallet app to work my phone needs to be unlocked. I also have my wallet app to ask for its unlock PIN once per day. I had already entered the PIN earlier in the day to check my Google Wallet balance. When you enter the PIN you need internet access. I do not think you need internet access to make a payment if the Wallet app is already unlocked. Tap and Pay is nice. If tap and pay is not available. I still have my leather wallet. I currently carry many but not all of my payment cards. My newest card is my physical Google decoupled debit card. They have this part of the equation covered. Many think this is a solution to a non-existent problem. Maybe. But that is not what excites me about Google Wallet. What excites me about Google Wallet is that when websites and app developers use the Google Payments API, they can make mobile payments super easy. Almost Amazon 1-click easy.

    What is the technology allowing me to do this? It is not just NFC and the technology they are already employing. They are now using Host Card Emulation or HCE. Outside of my first use of Google Wallet which was a simple how do use it in real life, I have only used one other time. Why only once? I keep forgetting I have it and my phone is in my hand when I am shopping. Will I use it more in the future? Yes. It is a little more convenient pulling out my wallet. Will it reduce wallet clutter for me? Yes. I will be able to remove at least 4 debit/credit cards from my wallet.

    Disclosure: I work in the financial services industry and I am always testing bank accounts, pre-paid accounts and alternative payment apps. I am an avid user of the Starbucks and the Dunkin Donuts QR code payment apps. My phone has the Square Wallet, LevelUp wallet, and the PayPal wallet installed. Which payment program of mine will end up getting the most use? Google Wallet. Why, it is more widely accepted where I shop then the others and because I am trying to cut down on my coffee consumption. You can find me on Twitter as

  • Taras Kuzin

    There are several players in the value chain. Another factor that may have affected the adoption of Google Wallet is no impetus for merchants to accept Google Wallet and make large investments into POS. The wallet rides on MasterCard's payment rails and offers the very same interchange fees. So, I can see how the carriers were probably a large "point of failure," there were other forces preventing the adoption.

  • Brad Terhune

    I would use it, but as a Verizon subscriber I am blocked by my carrier on this one.

  • justinTimeAgain

    Never used it, have had it for about a year now, and I've never seen or heard of anyone using it. Best of luck.

    I have used CoinBase to purchase goods though. To The Moon/Bitcoin and beyond!