Verizon says "No" to Google Wallet (UPDATED)

Dec. 5, 2011 | by James Wester

(UPDATED) Google has confirmed what has been speculated for some time: Galaxy Nexus phones sold through Verizon Wireless will not have Google Wallet on them.

According to an email late last night from a Google spokesman, "Verizon asked us not to include this functionality in the product."

Sources are also reporting that phones will not only ship without Google Wallet loaded on them, but customers will also be prevented from even downloading the application as well.

Verizon Wireless has not responded to inquiries (see update below), but the move is most likely an attempt by the carrier to control the phone's secure element, the chip that stores and safeguards account information, while it waits for the competing Isis network to come online.

Isis is Verizon's mobile payment joint venture with AT&T Inc. and T-Mobile USA. It is introducing an NFC mobile payment product that will also need access to a smartphone's embedded secure element. The JV is expected to bring its product to market sometime next year. Pilot programs in Austin, Texas, and Salt Lake City have been announced for the early part of 2012.

A necessary sacrifice

Google's acquiescence to Verizon's request may be an acknowledgment that the search giant just needs to get its phones in the hands of consumers at this point. Sacrificing access to the Google Wallet may simply be a necessary concession to Verizon since the carrier ultimately owns the relationship with the consumer and can offer a variety of competing phones and incentives. 

The Wall Street Journal is reporting Verizon is making the Galaxy Nexus available in the next few weeks for $299 with a two-year contract.

Several sources have reported that sales of the Google Nexus S 4G available through Sprint, and the original phone to offer the Google Wallet, have been slow. And as the largest wireless carrier in the U.S., Verizon has more than 100 million subscribers who are potential buyers for the Galaxy Nexus phone, or approximately double the subscriber base of Sprint. 

In every way except for Google Wallet functionality, the Galaxy Nexus handsets are Google smartphones with an impressive set of features. The devices are running Google's latest Android mobile operating system version 4.0, called "Ice Cream Sandwich," and include NFC technologies that can still be used for things like gaming and data transfers. Additionally, since updates to the phones operating system will come from Google, the possibility will still exist that it will be able to enable Google Wallet on the phones at some point in the future. 

Part of the process

Whether or not blocking Google Wallet will affect sales of the new phones or adoption of Google Wallet is yet to be seen. But according to mobile payment analyst Bob Egan, all of this wrangling between mobile payment players is to be expected.

"Verizon blocking Google Wallet is a bump in the road," Egan said in an email. "During the next 3 years we're likely to see more of these self-serving land grabs by the operators more as negotiating tactics than anything else."

"Before m-payments, whether through NFC or through other means, can take off, the solutions must be carrier and handset agnostic, in the same way SMS is today," Egan explained. "But just like it took several years for that logjam to be cleared with SMS, it's going to take some time for it to be cleared for m-payments."

UPDATE: Verizon Wireless spokesman Jeff Nelson responded with the following statement after this story posted:

"Recent reports that Verizon is blocking Google Wallet on our devices are false. Verizon does not block applications.

Google Wallet is different from other widely-available m-commerce services. Google Wallet does not simply access the operating system and basic hardware of our phones like thousands of other applications. Instead, in order to work as architected by Google, Google Wallet needs to be integrated into a new, secure and proprietary hardware element in our phones.

We are continuing our commercial discussions with Google on this issue."

For more stories like this, visit the Contactless/NFC research center.

Topics: Contactless / NFC , Mobile Apps , Mobile Payments , NFC , Trends / Statistics

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