What merchants and consumers need to know about Google Wallet

For businesses and consumers, we share with you some insights in our Google Wallet review.  What you need to use it, what it will cost, and our recommendation.

For consumers to use Google Wallet to pay at checkout you will need ALL of these elements:

google wallet phone citi paypass

  1. Download Google Wallet free app.
  2. A Citi MasterCard credit card with Paypass capability.
  3. An app-specific activation PIN that you must get from Citi.
  4. Sprint Nexus S 4G with tamper proof chip, dubbed the “secure element” by Google.  (In the first release, all payment card credentials will be encrypted and stored on a chip, called the secure element, that is separate from the Android device memory and is only accessible by authorized programs.)
  5. A merchant that with equipment enabled for Paypass.

If you have all of the above, then instead of whipping out your credit card, you’ll be able to enter your PIN number to enable or ‘open’ the application, then wave in front of the merchant Paypass reader.

If you have not registered your MasterCard credit card with Paypass capability to use with the Google Wallet,  you can still charge up to $100 if you have all the other elements complete.

For merchants to accept Google Wallet at checkout you’ll need a terminal capable of accepting Paypass. This is typically an add-on option for many signature capture terminals.

Card present interchange rates will apply.


  1. Google Wallet is currently field testing, but will become available to consumers this summer.
  2. Google Wallet stores virtual versions of credit cards and coupons on a phone.
  3. It will also store loyalty and gift cards in the future.
  4. Google Wallet is separate from Google Checkout, and can be thought of as the brick-and-mortar counterpart to the online payment nature of Google Checkout.
  5. At first, Google Wallet will only be available on the Nexus S 4G by Google from Sprint, but Google will expand it to other devices/platforms in time.
  6. Google Wallet will support Citi PayPass eligible MasterCard credit cards and the Google prepaid card upon launch, but will support more in the future.
  7. Users can pay with Google Wallet anywhere MasterCard PayPass is accepted, currently about 124,000 PayPass-enabled merchants nationally. These include American Eagle Outfitters, Bloomingdale’s, Champs Sports, The Container Store, Duane Reade, Einstein Bros. Bagels, Foot Locker, Guess, Jamba Juice, Macy’s, Noah’s Bagels, Peet’s Coffee & Tea, RadioShack, Subway, Toys“R”Us and Walgreens.


What does it cost merchants to accept MasterCard PayPass cards? It will depend on the interchange qualification. Paypass can be added to any US account holder.  Citi is promoting two CitiCards with paypass online. They are both rewards cards.  World Elite Merit 3 Base is most likely the qualified interchange rate for those cards which is 2.2% and $.10 per transaction. This is at the top of the range for consumer credit card interchange rates, which start as low as 1.05% for MasterCard debit.  As a merchant,  they currently get nothing in return for accepting Paypass cards now. With Google Wallet, there is the opportunity to get value with coupons and other features offered. About 60% of MasterCard transactions are rewards cards and the balance debit in basic retail operations.

Here’s why I won’t be getting a Google Wallet now and probably never:

I’m definitely a techie and an early adopter of some tech products.

  • I don’t have a Paypass.  Like most Americans, I use Visa more than MasterCard,  by about a 3:1 margin. (Note: changing credit cards regularly can lower your credit score, causing an increase in insurance premiums and other items.)
  • I don’t have the Sprint Nexus. I use an iPhone and I’ll never switch to Sprint even if I change phones. (Though AT&T could buy Sprint making that a moot point. )
  • As a consumer, I don’t buy the fact that this will replace my wallet. I’ll always need to carry my drivers license, therefore I’ll always have my wallet.
  • Big Brother Google.  Google won’t have access to my specific purchases (or so they say) but there are multiple points of data collecting and data pushing going on by multiple parties in order to send me timely offers etc. The is  largely unregulated terrain with unknown future consequences. Sorry, but I’m not opening the door to make it easier to collect more data about me or my buying habits.

I am interested in new payment technology involving my cellphone, but this is not the one.

Merchant recommendations: If you’re not leveraging the value add of Google Wallet marketing features, then consider what is the ROI for adding new equipment to support it.

Consumers: If you already have a MasterCard and the phone, see if you can add Paypass to it. I’d still hold off a few months before adding Google Wallet though to wait and see what bugs are reported.

Related article
Google, Citi, MasterCard, First Data and Sprint team up to make your phone your wallet


Citi with Arc Design are registered service marks of Citigroup, Inc. MasterCard is a registered trademark and PayPass is a trademark of MasterCard International Incorporated.

Leave a Reply

Your email address will not be published. Required fields are marked *

CAPTCHA * Time limit is exhausted. Please reload the CAPTCHA.

This site uses Akismet to reduce spam. Learn how your comment data is processed.