The State of Digital Wallets: Back to Plastic

By Wesley Fenlon

While Mastercard introduces a credit card with an LCD screen, Google Wallet prepares to go physical with its own universal credit card.

We're still not using Google Wallet. After more than a year of public availability, Google's NFC payment system has about much support as, well, NFC technology in general. Here's the problem: of all the Android smartphones available in the US, only seven models support Google Wallet. There are a few more phones equipped with near-field chips that can't access Wallet because Verizon, AT&T and T-Mobile have kindly disabled support for the app in favor of their own contactless payment system called Isis.

Google Wallet provided a brief glimmer of hope for a unified digital payment platform. That dream could still come true, but in the meantime, the field is incredibly fragmented. Every company looking to carve out support for its own payment system is taking a different tactic. Mastercard has PayPass, a tap-to-pay system that uses NFC chips embedded in credit cards for payments. Mastercard is also trying to expand to smartphones, and has recently released an SDK for Android and Blackberry that would work with NFC-capable phones.

But the company is also trying to innovate on the physical card front by releasing a new card with an embedded LCD display and number pad touch panel. It's not MasterCard's first LCD credit card, but it's an indication that the company is actively trying to develop new security practices and features to keep physical cards relevant.

If there's currently a trend for mobile payments, it's realizing that we may not be ready to dump our physical wallets just yet. Square is still in the game, partnering with Starbucks to support the mobile Square Wallet. But the company is also going to begin processing Starbucks' debit and credit interactions, and it still sells the Square register, a card reader for small businesses and startups. Supporting physical cards is a key part of Square's business.

Google seems to have realized the same thing. For all-digital payments to be a smash success, there can't be two or three or five different types of NFC tap-to-pay stations divided between different retail chains. If you're on Visa or Mastercard, you know a store will take you card, unless they're a cash-only joint. No digital wallet has come close to that degree of ubiquity. The solution? Merge digital and physical.

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The next big thing for Google Wallet, as reported by Wired and TechCrunch, is the Google Wallet card. It's a real, physical credit card that you sync with your Google Wallet account. It's a universal card, so you'll be able to use it as a surrogate for any card loaded into a Google Wallet account. Google hasn't been able to replace the entire wallet, but it may be able to replace a mess of cards with a single all-purpose piece of plastic.

The Google Wallet card offers a way around the lack of tap-to-pay stations, and it may also provide a way around Verizon's, AT&T's and T-Mobile's Isis. This also opens up the option of an iOS Google Wallet app, since NFC support won't be the platform's only payment source. It seems like the future of digital payment, at least for now, is taking a step back and letting plastic build its audience.