How to Spend Using Google Wallet

February 14, 2013

Google WalletFor the last couple of years, we’ve been hearing about the advent of the digital wallet. Coupons can be downloaded to phones, and the barcodes scanned at the register. Lately, though, the buzz has been about near-field communication (NFC) technology that allows you to tap your phone – or wave it – in front of a point-of-sale terminal and pay using your smartphone.

The digital wallet has been coming for some time now, whether it’s Visa’s version, or the Google Wallet. But how many consumers actually have a digital wallet? And is it practical to spend money using something like the Google Wallet? The time might have come.

Google Wallet Shows Up at My Grocery Store

Yesterday, for the first time in two weeks (the produce box and milk I have delivered weekly to my door has cut my trips to the store dramatically), I went to the grocery store. As I pulled out my debit card to swipe, I noticed that the store had new point-of-sale terminals. Right there, on the top, was a small sign proclaiming that the terminal accepted Google Wallet.

If the local grocery store in my secluded small town has Google Wallet capability, it must really be coming. Spending with Google Wallet isn’t as straightforward as just using contactless payment with your smartphone, though.

How Google Wallet Works

Here are the steps you need to take in order to get your Google Wallet to work:

  1. Set up a Google Wallet account and download the app to your compatible smartphone.
  2. Link credit and debit cards to the account.
  3. Designate a preferred card to be used.
  4. Use your smartphone to pay at stores where the proper hardware is installed to accept Google Wallet.

Google Wallet works by issuing you a virtual MasterCard account number. This MasterCard account is connected to your linked credit and debit cards – whether they are Visa, MasterCard, American Express, or Discover. When you pay offline, it’s the virtual account number that is given to the merchant (except in certain cases involving Citi MasterCards). Then, your preferred card is charged later. When you use Google Wallet for online purchases, your preferred card is charged directly.

Note that you can’t add certain cards to your Google Wallet. Store-specific gift cards can’t be added, and you can’t use FSA debit cards with your Google Wallet, either.

This situation is desirable in many cases, since it can prevent thieves from capturing your “real” information from transactions. Plus, the information on your linked cards is stored online, and not in the phone itself. If your phone is lost or stolen, you can deactivate Google Wallet, and wipe all the data related to the app. This can be helpful if you are concerned about fraudulent purchases.

Can Google Wallet Really Replace a “Real” Wallet?

One of the questions that many ask is whether or not a digital wallet like the one offered by Google can really replace a “real world” wallet. I admit that the idea is tempting. Carrying all that stuff around with you can be annoying, and we’re fast becoming a society where our lives can be toted around in the palms of our hands.

But something like Google Wallet is far from replacing the “real” wallets we have. First of all, until they digitize your driver’s license, you’ll still have to carry that around as a hard-copy. On top of that, there are some merchants that will be a little slow to adopt compatible technology. And you can’t rule out the small cash-only businesses that exist. Plus, if something malfunctions with your phone or with the terminal at the store, you are going to need a backup.

So, while spending with Google Wallet and other digital wallets is probably on the rise, it will be awhile before we see smartphones completely replacing the hardcopy version.

Have you used Google Wallet? How do you feel about it? What do you think about the idea of digital wallets in general? Leave a comment!


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Miranda writes about personal finance almost every day. An experienced freelance writer, she's covered your money online and in print from every angle and is always looking for new ones.

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