Google Wallet Scraps Physical Card Plans

Is it just us, or is Google Wallet feeling a bit light these days?

Friday brought more bad news for the service that was once hailed as the harbinger of a payment revolution to come, when the division announced that it would shelve its plans to introduce a physical payment card, AllThingsD reported. The decision came days after Google Wallet lost its Vice President, Osama Bedier, for as-yet undisclosed reasons.

Early reports indicated that the payment card would be all black and feature the product’s multicolored logo, along with typical features like a magnetic stripe and credit card numbers. AllThingsD also suggested that the move had come somewhat abruptly given the information it had received.

The news outlet says its sources suggest that Google Wallet had recently been updated specifically for a physical card and that many partners had expected to see this functionality be tested at the company’s upcoming I/O Developer conference in San Francisco.

But now that the decision is official, questions remain. Does not releasing the card set back the service as a whole? Or is this just a minor bump in the road for what’s to stay an interesting niche offering in the company’s portfolio?

What Happened Behind The Scenes

While all the details haven’t been made public, AllThingsD suggests that Google’s CEO Larry Page pulled the plug on the launch after a “glitchy run-through demo” one week ago. Sources told the news outlet that Page felt the service wasn’t as innovative as other solutions already on the market.

AllThingsD also suggests that the fallout surrounding the physical payment card release was one of the primary reasons Bedier was forced out of the tech company.

Despite the announcement, some believe Google Wallet is still an offering that can compete as a niche service. If the company follows through on its proposed plans to update and expands its Wallet offerings – with rewards, loyalty points, special offers and more merchant partners – it may be able to best the top competition, Apple’s Passbook.

The Big Picture

While a seemingly small maneuver on the surface – after all, the company didn’t pull back an existing service – commentators have speculated that it actually represents a big change in how the Google Wallet was meant to roll out to consumers.

“The card was part of Google’s larger strategic goal to know more about consumer purchases, given the immense potential value of that mostly offline-level data for its massive online advertising business,” AllThingsD says.

Google Checkout on the Web, Google Play payments and advertiser payments are already collecting large amounts of purchase data, and a physical card was one idea the company had that could extend this gathering power: and one that was already familiar and convenient to many consumers.

Still, could this be a clever diversion from a company adept at baiting the public’s interest? Google will have to answer this question when it provides an update on its Wallet service at its I/O Developer conference next week.

Read the full report here.