Digging Into Google Wallet
In a recent discussion on my blog about investing in "big bad" banks, Trader Network member russianmunkee suggested we all check out Google's latest foray into financial services, Google Wallet. The project could be a positive harbinger for Citigroup (C), a key early partner in making Google Wallet happen - or it may be a longer-term death knell for the banks as Google steals their lunches.
Well, time will tell which way that storyline will play out. In the near term, I was intrigued to learn what Google Wallet will offer. Here's what I learned in brief:
PCWorld offers a great starter read, appropriately titled Google Wallet: The Complete FAQ. The plan is pretty simple: you store credit-card info (securely, of course) on your Android-enabled phone; initially that credit card has to be in the MasterCard network. When you want to buy something, you wave the phone at the checkout, just like a credit-card swipe, and enter a PIN. (That PIN is part of the equation so that a lost or stolen phone can't enable a spending spree.) Interestingly, Google won't be charging merchants anything to process these transactions, positioning it instead as yet another compelling reason to buy an Android phone.
CNET dives into how secure Google Wallet is likely to be. The short answer: CNET thinks it probably will beat the security of traditional credit cards. Of course, PC World fired back with a post, Google Wallet has a Security Flaw - and that is the "authorized Android app", according to reporter Tony Bradley.
All in all, pretty intriguing stuff. I've become a serious Apple convert in recent years, but then again I would always hesitate to bet against Google in any arena that 800-lb gorilla decides to enter. What's your prediction for all this? Is this one more step towards that "cash-less" economy touted for so long? More importantly, what angles do you see as a trader for potentially profiting on the wallet-race?
[image: Wallet by edwaado on Flickr]
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Don Montanaro does not currently hold any positions in the securities mentioned in this post.