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Google Wallet pockets Visa

Credit colossus joins digital cash service

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Visa will be joining MasterCard in Google Wallet, making the Chocolate Factory's service acceptable just about everywhere - if you have the right app installed.

Google Wallet's US launch was limited to Citi bank accounts and its own prepaid card, and was only accepted on MasterCard's PayPass terminals. Visa has wasted no time announcing that it too will be finding space in the Google Wallet, and that Wallet users will be able to pay anywhere there's a Visa PayWave terminal installed too.

Just about every payment terminal shipped these days supports NFC (the near-field communications radio standard used to make the payments), and millions of Europeans can already make payments of up to £15 with a tap of a card, though few of them are aware of it. Those payments are based on PayWave and PayPass - provided by Visa and MasterCard respectively - and most terminals support both these days.

At the launch of Google's virtual pockets, a bank wanting to create an instance of their credit card for Wallet had to sign up with MasterCard, which was quite a limitation. Only now, thanks to Visa, they won't, and Google Wallet can play on an equal footing with operator-backed Isis as the shape of the industry starts to come together.

That industry is settling on a model that adds an additional layer to the distribution of credit cards, allowing that layer freedom to make money from coupons and other kinds of on-handset advertising while the traditional players make money in the usual way.

A bank wanting to get into NFC can now create an instance of its existing credit card, backed by either Visa or MasterCard as most cards are, and take that instance to Google, Isis or the UK's as-yet-unnamed platform. The user who has the appropriate hardware downloads the app from their bank and can then use it to pay for stuff with a tap of the phone.

Google Wallet muddies the water slightly by launching its own prepaid credit card, backed by MasterCard, but that should be considered a separate offering from the Google Wallet which is used to store instances of other credit cards.

Google plans to fill that store with coupons and offers, as well as loyalty cards and hopefully (in time) boarding passes and train tickets. Operators have the same aspirations, and have launched national consortia in several countries to create storage pockets of their own, housed within SIM cards.

Google's offering is physically inside the handset, so one can change operator or SIM without moving one's account. The consortia systems allow one to change handsets without affecting the account, but lock the user to the network operator. Banks will probably provide instances of credit cards suitable for all the popular platforms, so users will have to decide if they want to be locked to their network operator, or the Chocolate Factory, but they'll have to be locked somewhere.

Without Visa's support Google Wallet was going to have a hard time making progress, but with it onboard the platform is free to compete with network operators for ownership of the customers' pockets, at least until Apple steps into the NFC arena and changes the rules for everyone. ®

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