Google Wallet review: photos, videos, and availability

After a reveal back in May and the promise of a summer launch in New York and San Francisco, Google and its partners have started rolling out an update to Sprint's Nexus S 4G today that enables Google Wallet -- the most ambitious US deployment of phone-based contactless payments to date. NFC-enabled phones have been floating around Europe, Asia, and several American trials for the better part of a decade, but it's taken quite an orchestra to get to where we are today: Citibank, MasterCard, Verifone, First Data, and Sprint are all playing a role in making this happen, which explains (in part) why it's taken so long for a major industry force like Google to get to this point. Additionally, Google has just announced that it has licensed the NFC specs for Visa, Discover, and American Express cards, so we're hoping for a whole lot more card compatibility soon.

We've been playing with a Google Wallet-enabled Nexus S 4G in New York for a while, picking up everything from polos (well, simulated polos -- you'll see in the video) to cans of Coors Light... and we've done it all without pulling out a wallet, purse, or money clip. Want to know what it's like to pay for your cab fare with a phone? Read on.

What is Google Wallet?

First, a refresher on what Google Wallet’s all about: an application on your phone holds PIN-protected access to compatible credit, debit, and prepaid cards, loyalty cards, and gift cards. When you get to the counter of a store with a MasterCard PayPass kiosk, you hold your phone up to it, and you’re done -- payment information is transferred from the phone to the kiosk via NFC (along with your loyalty card and any special offers you’ve tracked down). MasterCard already claims a PayPass footprint spanning several hundred thousand merchants, so finding stores where Google Wallet works shouldn’t be a big problem; take a look next time you’re at your local pharmacy, gas station, or grocery store and you’ll probably see the PayPass logo on the credit card reader. Initially, the data transfer is one-way from the phone to the kiosk, but Google’s already pushing for a next-generation standard that will allow information to be passed back to the phone (instant digital receipts, for instance).

The Google Wallet application is initially only available on the Samsung-built Nexus S 4G that’s available exclusively through Sprint. Even though other versions of the Nexus S have the same NFC hardware built in and are technically capable of getting the job done, they won’t be supported out of the gate -- Google has decided to partner up with Sprint for this first phase. The company made it clear to us that it has every intention of going big with Wallet and expanding hardware support far and wide, but for the initial rollout, you’ve got to be using the Nexus S 4G to play. What Google wouldn’t tell us is what role Sprint plays, exactly, since it’s not involved in the actual payment process; presumably, it has agreed to put some amount of renewed marketing support into the smartphone, but we’re not aware of any technical or logistical reason why the standard Nexus S for other carriers couldn’t be enabled as well.

One of the biggest barriers to entry in making Wallet (and products like it) successful is the fact that a small army of companies are involved in each and every transaction, from the retailer up through the credit card processor. To that end, the only credit cards supported out of the gate are MasterCards issued by Citi, but Google’s got a crutch - it’s also launching Wallet with a built-in prepaid card that can be loaded and reloaded from all your standard card types, and that’ll allow a much larger audience to get on board from day one.

How it works

Provided you do have the proper Citi-endorsed MasterCard - and you will still need a physical card for this, one that already supports PayPass - linking the account is as simple as filling out the proper forms (card number, expiration date, account holder’s zip code and birth year, and so on). As we said, Google’s Prepaid card can be filled up with any credit card, and funds can be added in-app. So far American Eagle Outfitters is the only gift card you can purchase, and that requires you already having a card number and associated activation code.

After you’ve got your cards set up, paying is a simple matter of tapping the phone against the PayPass area of the store’s credit card reader (if you’ve already got a credit card with PayPass built in, you might already be familiar with the concept). If too much time has elapsed since the last time you’ve entered your four-digit PIN, you’ll be prompted to enter it, at which point you’ll tap again. The reader will recognize the payment, and you’re done. What’s more impressive is the speed -- as you will see in the video, a split second after tapping our Nexus S to the PayPass contraption in the back of a cab, our pre-paid card had been recognized. It’s by far faster than using a PayPass-supported plastic credit card or going through the whole swiping process.

Even though the phone should work at any PayPass location, I’d mentioned that Google is “launching” Wallet only in New York and San Francisco to start. So what does that mean? Part of it is simply marketing - Google and its partners will be putting some concentrated investment into public awareness in these markets - but additionally, users will be seeing a lot of Google Offers here. Offers comprise both Groupon-style deals and more traditional coupons, some of which may appear while you’re running Google searches; if you see one you like, you can “clip” it, at which point it automatically transfers to your Wallet account. Macy’s is one of the retail partners Google is working with closely out of the gate, which means users should expect the full experience: they’ll be able to both pay and transfer Offers from the Wallet app to the payment terminal when they order up some polos.

Security is obviously a big concern on everyone’s mind, and Google sounds well aware -- the folks we spoke with were quick to bring it up. At the most basic level, the Nexus S’ NFC chip is totally disabled whenever the display is off, which means it won’t transmit or receive any data - baddies aren’t going to be swiping your details from nearby while your phone’s in your pocket. Additionally, access to your card data is handled by an encrypted chip on the phone - what Google calls the “secure element” - which can’t be accessed directly by any apps on the phone; instead, communications are brokered through an intermediary that controls exactly what services on the phone have access to what information (Google’s really proud of this -- they suggested that the system is unprecedented for a mobile payment service). In other words, it’s nigh impossible for a rogue app to read your financial information off the phone without your permission.

Wrap-up

For Google, “soft launching” a service is its modus operandi, with an eye for future potential and continuous iteration — take Android, for example, or the long-standing “beta” moniker on virtually every app it’s developed (and only recently nixed). To understand Google Wallet in its current state is to understand how Google itself operates. Wallet is hitting the market not as a complete tool; although there is already an impressive number of participating companies, there are still many more that are needed to become truly ubiquitous. Wallet in its current state works exactly as you’d expect, efficiently and with enough security to assuage many (but not all) fears. For Google to pull this off, it needs more participating retailers, banks, and most certainly more compatible NFC-equipped phones — starting with the entire Nexus S line (not just Sprint’s 4G version).