Can Google Wallet Hold Its Own in Competitive, Highly Regulated ID Authentication Landscape?

Depending on the country they live in, Android users of the Google Pay app may have noticed a recent update replacing Google Pay with a new, multipurpose Google Wallet.

Per Google, the roll out of the wallet will impact users in close to 40 countries across Europe and Middle East including the U.K., France, Belgium, Ireland, Germany and the United Arab Emirates (UAE).

Read more: Google Wallet Launches as Google Pay Sidekick

Beyond just a rebrand, the latest update expands Google Pay’s existing offering and enables users to not only make contactless payments, but store and use digital identity cards and health passes, hotel keys, event tickets and even store a digital copy of their COVID-19 vaccination card and test records. Users in Germany, the only country besides the U.S., can also add PayPal to their Google Wallet.

With this move, the U.S. search giant seems to be placing its bets on these technologies to turn its Google Wallet into a multipurpose identification super app, and hold its own against tough competition in the mobile wallet space.

Digital ID and Authentication

For as long as monetary systems have existed, they have relied on technology that allows people to identify and authenticate payments. Signatures, passwords, identification numbers and biometrics are all ways of verifying that someone is who they say they are and aren’t fraudulently spending other people’s money.

Related: FIs Use Digital Identity to Curb Money Laundering and Comply With Gov’t Rules

But authentication isn’t just a challenge for processing payments. Google Wallet is seeking to position itself as an authentication app that uses the same technologies that have become commonplace in making payments to enable people to access their workplaces, unlock their cars, prove their memberships, and even replace physical identity documents.

With dedicated APIs for each functionality and Google partners that specialize in each specific area, the new Google Wallet features are set to go mainstream in the coming months and years.

In the U.S. and Canada, on-phone ID solutions have already mostly replaced physical student cards at a number of universities thanks to Google technology.

And while digital car keys were pioneered by Apple and BMW last year, Google’s inevitable arrival on the scene marks the next stage in the technology’s evolution, with the potential to make physical car keys redundant in the same way that mobile wallets are increasingly replacing plastic debit and credit cards.

Finally, with countries around the world passing legislation to reduce their dependence on physical documents, digital IDs becoming mainstream may well be a question of when rather than if.

Learn more: The Future of Digital Identity Verification: Driven by Technology, Shaped by Regulators

In Europe, while schemes like Norway’s BankID have seen widespread adoption, they have so far been limited to online authentication processes, and in the case of BankID, are only really useful for making payments.

What’s more, other countries have faced significant challenges, and although an EU-wide initiative is in the works, it may be years before a practically feasible pan-European digital ID goes into effect.

Yet Google’s ultimate goal of integrating digital IDs is perhaps the most ambitious aspect of Google Wallet. As Google engineers hinted in 2020, the ultimate prize for the platform is a generic authentication technology that would allow any identification scheme to be supported by the Google Wallet:

“[Android] APIs for managing and presenting identity documents [are] generic enough to be usable for other kinds of electronic documents, from school ID or bonus program club cards to passports,” they noted.

In the race to build a broadly applicable digital ID wallet, Google faces stiff competition from Apple, which already supports mobile driving licenses in Arizona and Maryland, with more U.S. states and territories committed to introducing the feature soon.

Read more: Digital Driver’s Licenses Herald New Age of ‘Mobile ID Choice’

In the EU, there is the additional challenge that authorities are likely to block any move by Big Tech to gain too much influence in the emerging digital ID ecosystem. Instead, the European Commission has suggested that it will build its own mobile wallet to support the EU-wide digital ID expected to launch in the near future.

The idea of a mobile wallet that can be used for a range of identification purposes beyond making routine payments has certainly taken root, but what Google Wallet’s role will be in the evolving ID authentication landscape remains to be seen.

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