Google Plans Revised Mobile Wallet: Report

With Apple Pay gaining momentum, Google Inc. reportedly is planning to relaunch a new version of its wallet in late May at the Google I/O, according to The Wall Street Journal.

Last week, technology sites reported Google employees were testing a new payments system called Plaso in which consumers initiate a payment by saying their initials to the cashier. It is not clear if Plaso represents the key technology change for the new Google Wallet, but the system would work on Android phones and integrate with the wallet.

Though Google Wallet was one of the first mobile wallets on the payments landscape three years ago, Apple Pay has created far more consumer awareness and card issuing bank support in just a few months.

Last month, Apple CEO Tim Cook revealed that the company's maiden voyage into mobile payments has secured the support of 750 banks and credit unions and was accounting for two thirds of the contactless payments taking place in the U.S.

Google never enjoyed such a coming out party, instead muddling through its first year with just one supporting bank and ultimately making things easier for issuers by opening up the wallet in August of 2012 for users to make payments from any credit or debit card.

Still, it makes sense that Google would try to reinvent its wallet offering, says Richard Crone, chief executive of San Carlos, Calif.-based payments consulting firm Crone Consulting LLC.

"I know they are not down for the count yet, there is more to come from them," Crone said. "They have too much to gain."

From the latest information his company has obtained regarding Google, Crone said it appears a revised wallet may not rely on Host Card Emulation technology as it does today, but could turn to Bluetooth LE.

"That would make a lot sense for them," he added.

Google has "stayed the course" for several months and has not lost any key executives in the mobile payments area, Crone said.

A sense of urgency could be coming into play for Google as well, considering Samsung made its move to counter Apple Pay this week in acquiring LoopPay.

That move allows Samsung to introduce a different technology from the Near Field Communication that powers industry competitors Apple Pay and Softcard. LoopPay's fob or case transmits a magnetic signal to a standard point of sale terminal, which means merchants do not need new hardware. As such, Samsung could quickly have an influence or role in retail joint venture Merchant Customer Exchange's upcoming CurrentC mobile pay method. Some MCX retailers have already turned off NFC readers to thwart Apple Pay from taking hold.

Google Wallet, originally an NFC-based system that switched to the cloud-based HCE format, has been on the sidelines for much of these latest exchanges. Google is trying to bring together an "unruly coalition of device makers, wireless carriers, banks and payment networks," according to the WSJ report, citing anonymous sources. Apparently, Google is ready to make some revenue concessions in order to get players on board, such as giving wireless carriers a fee for each transaction.

It's a business model that Apple never had to visit, since it controls what goes on its devices and convinced banks to take less of a cut on transactions.

However, Google can still play the strong Android market card, giving the payments networks and banks the opportunity to be involved in a mobile wallet that serves customers who do not own one of the newest iPhones.