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Google may pay wireless carriers to revive Google Wallet

Google may pay wireless carriers to revive Google Wallet


Mo' money, mo' problems

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Google Wallet has had, at best, a checkered history. Blocked by carriers, it suffered through changing product direction and competition from its own partners. Then, of course, Apple Pay was released and quickly became the leader of mobile payments. So a Wall Street Journal report that says Google is looking to revive Wallet to make it a genuine competitor is no surprise, and neither is it a surprise that in order to make it happen, Google needs to "wrangle" various carrier partners.

What is a surprise are the extreme lengths that the company is reportedly willing to go. The WSJ had earlier reported that Google is considering acquiring Softcard (née ISIS), the mobile payments company that was formed out of a consortium of AT&T, Verizon, and T-Mobile. That would be a bold move and signal how much Google is willing to work with those carriers, who to-date have been downright hostile to Google's mobile payments efforts.

Google and the carriers need each other now

But the biggest bombshell is that Google could pay the carriers to "feature Wallet prominently on their Android phones" and may even be willing to share mobile advertising revenue with them as part of a wallet deal. Advertising, of course, is Google's main source of revenue and the idea that Google may be considering sharing it with carriers just to get Wallet going is a sign of just how much leverage these carriers have over the company.

It's not all one-sided, though; the carriers have a vested interested in ensuring that there's a mobile payments solution that's competitive with Apple Pay. Apple doesn't share any of the transaction information (and in fact, it's set up so that Apple doesn't see it in the first place) nor any of the revenue with carriers — and both are potentially sources of a vast amount of money if mobile payments can truly supplant credit cards. Google may be more willing to collect and share both of those things.

So maybe the WSJ's report shouldn't be a surprise after all. As always with mobile payments, it's going to be an insanely complicated dance between partners who might be holding knives behind their backs, but as Apple Pay gains traction it's a dance that neither Google nor the carriers can afford to avoid. We could see something come to pass at this year's Google I/O developer conference.