On Wednesday, Google said that its Google Wallet payment service now supports all credit and debit cards from Visa, MasterCard, American Express, and Discover. Naturally there's a catch: Google Wallet is currently available only on selected phones from Sprint and Virgin Mobile, as well as the new Nexus 7 tablet. But that's ok: Google Wallet should be ready for prime-time use when NFC technology becomes a standard feature in every mobile device in the near future.
Previously the only way to use Google Wallet was to add a CitiBank MasterCard, a gift card from AEO, Bloomingdale's, Macy's, or The Container Store, or add a Google Prepaid Card. This is seemingly still the same when adding said cards to the Google Wallet app directly. To use any other card like Discover or American Express, Google has decided to add a "linked" feature that creates a virtual MasterCard to hide the user's credentials from merchants.
"When you add credit or debit cards to the Google Wallet mobile app, you will be issued a virtual MasterCard card by The Bancorp Bank, Google Wallet’s partnering bank," Google states. "This virtual MasterCard is referred to as the 'Google Wallet Virtual Card' in the Terms of Service. When you activate your credit or debit cards in Google Wallet, they are linked to the virtual MasterCard card. When you make an in-store purchase, Google Wallet facilitates payment to the merchant for your in-store purchase using the virtual MasterCard, then charges the amount of the original purchase to your selected debit or credit card."
For these transactions, Google Wallet will present the virtual MasterCard card to the merchant, thus transactions on the user's actual credit card statement will read a "Google *merchant name." If prompted by the cashier, users should state that they're "paying with credit" via MasterCard. The last four digits of the virtual MasterCard account can be found in the card details page of one of the linked cards.
"To support all credit and debit cards, we changed our technical approach to storing payment cards," said Robin Dua, Head of Product Management, Google Wallet. "The Google Wallet app now stores your payment cards on highly secure Google servers, instead of in the secure storage area on your phone. A wallet ID (virtual card number) is stored in the secure storage area of the phone, and this is used to facilitate transactions at the point of sale. Google instantly charges your selected credit or debit card. This new approach speeds up the integration process for banks so they can add their cards to the Wallet app in just a few weeks."
The updated Google Wallet also includes a new security feature that makes it possible to remotely disable the mobile wallet on a lost or stolen phone/tablet. Users simply log onto Google Wallet online, select the listed device, and hit the disable button. After that, Google Wallet will not authorize any transactions attempted with that device. If the Google Wallet online service can establish a connection to the device, it will remotely reset the mobile wallet, clearing it of card and transaction data.
Right now the only devices that support Google Wallet are the Samsung Nexus S (Sprint), the Samsung Galaxy Nexus (Sprint), the Samsung Galaxy Nexus GSM/HSPA+ (Google), the Samsung Galaxy S3 (Sprint), the LG Viper 4G LTE (Sprint), the LG Optimus Elite (Sprint, Virgin Mobile), and the HTC EVO 4G LTE (Sprint). The just-released Nexus 7 tablet also supports Google Wallet although we had to force-install the update via Google Play online in order to upgrade the actual tablet app.
So far supporting merchants include Toys"R"Us, Old Navy, OfficeMax, CVS/pharmacy, RadioShack and many more, depending on the location.