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Google is sidestepping the telcos that seek to dominate the mobile wallet.
November 4 -
The payments industry has spent years convincing itself of a digital wallet future that seems inevitable, but the end game is undeniably far off.
April 8
Google Wallet users can now activate the accompanying plastic Google Wallet card through the mobile app, a process that will become increasingly common as mobile payments advance, experts say.
The Google plastic card, a recent addition to the Google Wallet offering, lets consumers use their Google Wallet or a linked bank account at merchants that don't accept contactless Near Field Communication payments. After a consumer orders the card, the Google Wallet app asks at every login whether the card has arrived and needs to be activated.
Many companies will support plastic card activation through mobile apps in the future, says Richard Oglesby, senior analyst and mobile pay expert with Boston-based Aite Group.
"Any consumer using Google Wallet probably got it through a mobile device, and that's the only thing they use," Oglesby says. "Those consumers wouldn't want to have to do the activation on another device."
Other digital wallet providers, such as PayPal and Isis, also offer plastic cards to consumers. PayPal's plastic card is necessary to handle payments at most of the merchants it reaches through an arrangement with Discover Financial Services. Isis, a venture of AT&T, Verizon Wireless and T-Mobile, urges users to sign up for an American Express Serve prepaid card if they do not have an account with its other card-issuing partners, JPMorgan Chase and Wells Fargo.
Banks will view activation through mobile apps as another form of customer service, says Matthew Talbot, senior vice president of mobile commerce for Germany-based SAP Mobile.
"Whether you activate a card through an app or on your PC, you are still activating it over an electronic medium," Talbot says. "What it does represent is simplifying the process for the consumer, and we know that all advances in mobile pay and commerce are about making it easier for the consumer."
Security should not be an issue with an app-based activation process, says Julie Conroy, Aite Group's fraud prevention expert.
"I think that properly secured, activation through a mobile app is perfectly acceptable, and I do think we'll see more of this going forward," Conroy says.
In fact, if mobile wallet providers have the proper security in place, "the mobile environment has the potential to be more secure than the online environments," Conroy says.
As such, more wallet providers offering accompanying plastic cards will likely take advantage of a mobile app for activation, says Madeline Aufseeser, a senior analyst with Aite Group.
The most common activation method is to call a toll-free number, but more consumers are choosing to activate cards at an ATM, Aufseeser says.
Ultimately, the consumer should not have reservations about the activation process, SAP's Talbot says.
"You are doing it securely either way with mobile or online," Talbot says. "There is no real difference."
Google introduced its plastic Google Wallet debit card, issued through Bancorp Bank, in November. The MasterCard-branded card also provides ATM access for U.S. customers who have completed Google's identity verification process.
