You Can Turn Your Phone into a Credit Card with Google Wallet. Will You?

By Veronique Greenwood | May 27, 2011 4:57 pm


What’s the News: Your phone can now be a credit card, thanks to Google Wallet, announced yesterday with great fanfare. With this system, when you swipe your phone over a sensor, a near-field communication (NFC) chip gives the merchant your credit card information. You punch in your PIN, and: cha-ching.

Google has partnered with 20,000 companies who will take payments this way, including Macy’s, American Eagle, and Subway.

How the Heck: The NFC chip, which is only available in Sprint’s Nexus S phone at the moment, can only be activated by a merchant’s sensor (which means that no one can extract the information from your phone without one), and it’s only active when the phone’s screen is on, which is intended to prevent you from purchasing a sandwich with your butt when you sit down.

What’s the Context: Other companies aren’t far behind. In fact, one of them says it has bone to pick with Google over this—PayPal has filed a suit against the search giant and two ex-employees who are now heading up the department that produced Wallet: The suit says that the ex-employees disclosed PayPal trade secrets to Google and major retailers.

Not So Fast: Sure, the idea is cool, and may eventually take over a good chunk of the market for processing payments. But it’s not like it will be spectacularly less tedious to use than a credit card, and NFC-based payment methods have crashed and burned before from lack of demand, in Europe and Asia. And what happens when your energy-gulping smart phone runs out of batteries? No more money for you?

The Future Holds: Wallet is only available to Nexus users on the Sprint network, but Sprint is working on putting out more phones with the capability. Last year, AT&T, T-Mobile, and Verizon announced that they were also working on an NFC-based payment system (called ISIS), and Apple is expected to include NFC chips in a future iPhone.

But real futurists might want to note that have such chips in phones might be passé eventually. You can already get an RFID chip—the kind in some credit cards, which function a bit differently from NFC chips—injected into your pets for tracking, and it’s not too much of a stretch to see a chip inserted into your wrist, which you present to merchants for their scanning convenience.

Image: Google

  • Tom Hanna

    How convenient, all your day to day information in one place. Loose your phone and you are definately hooped!!!

  • Iain

    A long, long time ago I read a sci-fi story ( i forget the title) where the people all carried a thing called a joy stick. It was a phone, computer, payment card, library and many more things all rolled into one. I guess we are headed down this road.

  • Jason

    “it’s not like it will be spectacularly less tedious to use than a credit card” I agree with this. A bank card is much more convenient than writing a check or having to carry cash around. Using your cell phone to pay is no more convenient, and probably less convenient, than using a bank card. I carry a cell phone around most of the time, but not all the time. I always have my wallet and thats not likely to change. I’m all for new technology though so let’s see how it goes. I know this article wasn’t written as an in depth description of Wallet, but listing some benefits would have been nice.

  • Bob Snyder

    Great, a reason for people to steal your phone now instead of your wallet. And you’re trading the “convenience” of not having to carry a credit card (or wallet or purse) for the inconvenience of having to put more security on the phone (i.e. having to punch in a code every time you look at the phone or risk not having the phone locked if it gets lost or stolen.) Not to mention if you do have to enter a code to unlock the phone now and it was lost while locked, you won’t be able to get it back unless you physically wrote your address/number somewhere on the phone (probably on the battery cover) which people don’t/won’t do.

    And excuse me for being picky, but if you have a PIN and a pre-paid balance, it’s not called a credit card. If you notice on the little screen there in the picture, it clearly says pre-paid card. Putting a credit card on your phone (that wouldn’t require a PIN or even a signature if the purchase was under $50 at some retailers) could be a very bad idea.

    And the more stuff you combine into 1 gadget, the more likely it will get stolen and the bigger the headache of replacing it if it is lost or broken.

    Count me out.

  • Jennifer Angela

    Call me old-fashioned, but I even refuse to purchase every day goods with a credit card for safety reasons and for many other reasons too, that I will explain later. It´s fun to have your own principles. It cracks me up to see how many people react to it. Attempt to visualize the faces of bank clerks when I refuse to accept a credit card including an overdraft. I have seen too many people lose their freedom and dignity and waste their lives due to that invention. Imagine also – the faces of surprised shop assistants, when I pay them in cash. But you see, I dislike causing stressful situations that drag me down all by myself. I do not find it rational, responsible or mature of any adult person to pay for milk, butter, bread, yoghurts, dinner on the menu and other goods I purchase every day or on most days with my credit card. Also, that way I have no financial problems. Unlike most of my credit card using friends, who lose the oversight over how much money exactly they spend every day and are surprised when they end up having an overdraft, that they then can´t pay off in years and years. Also if somebody steals my so-and-so-many bucks (not a huge amount) I allow myself to spend a day, that isn´t the end of the world. It´s just bad luck. My phone, that always has a credit of about five bucks on it and itself is not worth much more – again I don´t have to invest too much concern into what may happen, if somebody bothers to steal the old thing one day. It´s the easy life people. But don´t get me wrong. Of course I have a second beautiful camera phone at home, that remains there. I do want to enjoy the beauty of current technical inventions just as much as you guys do. I just don´t like to stress myself out. And so I would never use a credit card phone, but I think people who use a credit card everyday may enjoy having their cash and their phone in one place. I think it´s a good invention. Although I have to warn you guys – the more a phone can do, the less handy it turns out to be as a phone. I´ve made that experience. That was actually the main reason I decided to leave my beautiful camera phone at home in the first place. It makes great pictures. But it´s a lousy phone. My simple cheap phone as opposed to that, is a great phone. I can call anybody anytime without it asking me for ten minutes which profile I prefer and not letting me call anybody unless I answer. That´s the kind of thing beautiful and intelligent phones do. Add another function – the credit card function – and your multifunctional phone may just drive you crazy.

  • Jennifer Angela

    Oh, and for the record… I loved this article!

  • Holli Moreno

    …are we that lazy that every technology is geared towards eliminating every effort that we exert no matter how minimal they are? Is carrying and using a credit card too burdensome?

  • Veronique Greenwood

    @ Bob, there’s a prepaid option (shown in the picture), and there’s a credit card option.

  • Michelle

    It seems like a bad idea security-wise. I wouldn’t do it.

  • lil asian boy

    rfid chips are stupid, why would u want a machine inside ur body. And the
    idea of the google wallet is stupid cuz if u lose ur phone ur done for

  • Jay Fox

    I’m with Jennifer. Cash is king. My cell phone only makes and receives calls. It’s so cheap I’m not worried about losing it. No one would steal it. And for photos, well, I have a real camera for that.

  • Matt B.

    Geez, why not just build a slot in the phone to hold a bank card?

  • chuck

    “rfid chips are stupid, why would u want a machine inside ur body. And the
    idea of the google wallet is stupid cuz if u lose ur phone ur done for”

    If rfid is your concern your cell phone already has one in it so does your debit card,state ID or Drivers licence even your local grocery store club card has one so an app that you dont even have is the least of your worries


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