The Google Wallet continues to dominate the emerging field of mobile payments with its strong lineup of financial industry and merchant partners including Citi, MasterCard, Visa and First Data. We caught up with Rob von Behren, co-founding engineer for Google Wallet, this week to find out what's on the drawing board for this product in the coming year, as well as the company's overall technology philosophy vis a vis mobile payments.
In 2012, Google will expand out its APIs to make it easier for third parties such as Groupon, merchants and banks to interact with the Google Wallet, von Behren says, noting that Google will not charge for the use of these APIs. "From Google's perspective, the wallet is an appliance for users," he says. "It should be able to hold whatever a user would want in it. It should work with all credit cards and coupons from third parties such as Groupon. The way that Google Wallet or any wallet will be successful is by being as open as possible and allowing as many different payments into the wallet."
The new APIs would allow banks to more easily interact with the wallet and with their customers. "If I'm looking at a credit card in the wallet, I'll be able to click a button or link and go out to my Citi application on the same handset and look at my mortgage value or whatnot," von Behren says. "We'll be working on other APIs that make it easier for banks to offer cards to their users. So if I'm in my Citi application, I might get asked if I want my credit card sent to my wallet. That would make that application process a smoother for users."
Although so far Citi is the only bank that lets its cards work with the Google Wallet, Google is in conversations with all the large banks, von Behren says, which are at various stages of interest. Some technical work is required on the part of banks and payment processors like First Data to move their cards onto the Google Wallet and this will take time, he acknowledges. "Many of the banks' host customer database systems are set up to do batch processing of credit accounts. To issue a new credit card, typically they gather all the credit accounts into a file that's sent to a personalization bureau that prints and mails out plastic cards," he says. "Most banks are not set up to do real-time issuance of a card out to a phone, but many are in the process of updating their back-end systems. We're discussing the technology with them, working with them to ease that technology transition, and also working with the industry at large to back standards around this." Standards would enable banks to make one technology upgrade and then let their cards work with any mobile wallet.
The company is also working on similar APIs to improve the experience for merchants. For instance, one would allow a customer perusing target.com to purchase a gift card and electronically send it over to a family member who has the Google wallet. Google is also working to extend its merchant network, but like banks, merchants have technology upgrades to make to accept the Google Wallet. For one thing, they need to make software changes to receive the dynamic CVV codes the wallet application issues. And they have to make sure their payment terminals can understand the protocols that are being used by the handset. "That's a big challenge for the industry in general and something that we spend a lot of time working on," von Behren says.