Google Wallet: How it Works

Google has launched its first version of the Google Wallet app to Sprint, a significant step in the implementation of near field communication (NFC) technology.

With NFC, users can simply pay for goods by waving their phone in front of a contactless payment scanner. In other words, NFC allows for simplified transactions, data exchange, and connections with a touch. A smartphone or tablet with an NFC chip could make a credit card payment or serve as keycard or ID card.

We've been testing it extensively, and today we're releasing the first version of the app to Sprint. That means we're beginning to roll out Google Wallet to all Sprint Nexus S 4G phones through an over-the-air update-just look for the 'Wallet' app, Osama Bedier, Vice President of Payments, wrote in a blog post.

The 'Wallet' app, which would be available in Sprint Nexus S 4G phones, would work with Visa, American Express and Discover in future, with Citi and MasterCard being launch partners.

Google plans to bring the app to more phones and said, Our goal is to make it possible for you to add all of your payment cards to Google Wallet, so you can say goodbye to even the biggest traditional wallets.

Let's see how Google Wallet works:

Google Wallet supports two kinds of cards:

*Citi MasterCard credit cards, and

* The Google Prepaid Card

Look at the above symbols at checkout. Tap your phone to pay with the virtual credit cards stored on your Google Wallet. Once you tapped your credit card, your phone sends payment, and, at some merchants, offers and loyalty information.

If you already have Citi MasterCard, open Google Wallet and enter your account information. After Citi verifies it, your credit card credentials are stored to a secure microchip on your phone. You can then tap your phone to pay. If you have a Citi MasterCard and want to confirm that it works with Google Wallet, check here.

If you do not currently have a Citi MasterCard, you can apply for one here.

Google Prepaid Card

The Google Prepaid Card is a virtual card that you can fund with any of your existing credit cards -- no Citi MasterCard required. After you activate the Google Prepaid Card in Google Wallet, you'll get $10 in your account.

You can then top up the card with additional funds from any of your plastic cards. You'll pay no fees to top up your Google Prepaid Card at least until the end of 2011. Since the Google Prepaid Card is purely virtual, you won't get an actual card in the mail.

The Google Prepaid Card is powered by MasterCard and Money Network.

Google Wallet can store gift cards for participating merchants. When you tap to pay at a merchant, Google Wallet transmits your gift card information to the terminal.

Security

Google Wallet is designed and engineered to enable safe, secure payments.

In fact, Google Wallet's security features go beyond what's possible with traditional wallets and cards, Google said in a statement.

Google Wallet requires you to set up a Google Wallet PIN that must be entered before making a purchase. This PIN prevents unauthorized access and payments via Google Wallet. Android phones also feature a separate lock screen.

Google Wallet stores your encrypted payment card credentials on a computer chip on your phone called the Secure Element. Think of the Secure Element as a separate computer, capable of running programs and storing data. The Secure Element is separate from your Android phone's memory. The chip is designed to only allow trusted programs on the Secure Element itself to access the payment credentials stored therein.

The secure encryption technology of MasterCard PayPass protects your payment card credentials as they are transferred from the phone to the contactless reader.

What to do if your phone is lost or stolen?

Even though the Google Wallet PIN and Secure Element protect your payment card information, you should still call your issuing banks to cancel your cards.

Watch the below video on Google Wallet: