What would a physical card counterpart mean for Google Wallet?
According to one analyst: a major step backwards.
That sentiment comes from Brian Riley, a senior research director and analyst with CEB TowerGroup, who shared his thoughts on Google Wallet’s physical card plans with American Banker earlier this week.
We first covered the Google Wallet plastic card rumor back in November, and the whispers have grown louder ever since. Discover is reportedly Google’s network of choice, which makes since given the issuer’s physical card history with PayPal.
But while Discover may have experience in the mobile wallet-turned-physical card realm, according to Riley, the plastic transition is still a bad sign.
“It’s a new model, but it’s like ‘back to the future’ again,” Riley says. “We don’t know if they will really get it (a plastic card) out in the field, but it could just be like another PayPal prepaid card out there to function at the point of sale.”
And according to American Banker, PayPal’s iteration of a physical card counterpart has hardly been a raging success. During a recent earnings call, eBay said that 70 percent of PayPal’s transactions are completed without the card. What’s more, the PayPal and Google wallets were never intended to have physical counterparts, but instead are headed that way in an attempt to save their platforms.
“The plastic-card news in particular is a poor indicator of the viability of a mobile payment system that relies on Near Field Communication technology to enable payments at the point of sale,” American Banker surmises.
As the article states, this is hardly the only issue Google Wallet has faced this year. In early 2012, Google had to address a security flaw that allowed access to wallet PINS through “rooted” phones. At launch, Google Wallet also had trouble on-boarding card brands and issuers other than Citibank until August, when it revamped its platform to allow linked cards to function through a virtual MasterCard.
Google also had to face off with American Express and Isis-supporting mobile carriers at various points throughout the year, though it did escape from both disputes relatively unscathed.
“Google has had its ups and downs this year, and you are always wondering what is next from them,” Riley said, “but not much of substance has come out.”