Extolling the traditional Google philosophies of "openness" and "collaboration," Google Wallet was pitched as the ecosystem that would usher America into mobile payments using near-field communication (NFC).
But a top exec from the world's largest SIM card maker, Gemalto, says Google Wallet is just one of hundreds of similar mobile payment pilots taking place around the world; in other words, a mobile payment platform with very limited scope. And it's not just because at launch, Google Wallet will work on only one carrier (Sprint), one type of phone (the Nexus S 4G), one payment processor (First Bank), one bank (Citi), and one credit card (MasterCard).
"It's an attention grabber," said Gemalto's vice president of telecommunications, Jean-Louis Carrara. "I understand the need for it, it's good because it starts educating people about mobile payments. But to get to a point where you're changing consumer behavior, you need it to work on all phones, from all operators, and will all banking cards."
As he watched Google's presentation Carrara picked up on something most members of the audience probably did not: there was only one Trusted Service Manager (TSM) agreement.
TSM is a type of technology that issuing banks use to securely send your account information over-the-air to your Google Wallet, so your credit card can be charged the moment you tap your phone to a payment reader. First Data, the world's largest payments processor, was selected to provide a TSM platform for Citi to link its MasterCard credit cards to Google Wallet. However, a TSM will need to be set up for each new issuing bank that joins.
"Google Wallet opened with one bank, and we understand it is not easily opened to other banks," he said. "That's because they only announced one TSM."
"Google Wallet is secure in the way it's currently implemented, but it might not have the flexibility to support multiple banks, multiple card companies, et cetera," Carrara said. "Google Wallet needs to scale in complexity with a number of banks and carriers involved. Based on my understanding this isn't the definitive ecosystem."
Gemalto may be a tad biased. It has been heavily involved in NFC technology, most recently developing a MasterCard-authenticated SIM card. Gemalto also provides TSM platforms, and was once rumored to be closing an agreement with Google Wallet's biggest rival, Isis.
But SIM cards were completely left out of the Google Wallet ecosystem; instead of on a SIM card, Google Wallet would store your account information in a secure part of the handset.