Go Go Google Wallet!

“Whoa, how did you do that?” I didn’t say anything when the clerk at Duane Reade—or was it Walgreen’s?—asked me how to pay. I just smashed my phone into the PayPass terminal. Money poured out of my Nexus S, and into somebody’s corporate coffers. Magic!

But then I still had to tell the dumb credit console whether I was paying debit or credit. And then I had to wait for my receipt to print out, all ten miles of it. Which made my attempt at being a mysterious stranger with mysterious magical technology quickly disappearing into the night fail miserably since it would’ve been mad awkward to stare directly into each other’s eyes for 45 seconds without saying a word.

Google Wallet is clearly a close-up glimpse at what the seamless, slippery future of money looks like—MasterCard is an appropriate enough vector for a technological Mark of the Beast, I suppose—but it’s still very much in 2011. Friction abounds.

If you’re unfamiliar with Google Wallet, read this, or here’s the rough rundown. (Really rough, since Google Wallet’s a lot of little things, banded together.) Google Wallet is an app that lets you pay for things using your phone, either by tying your credit card(s) or loading up gift/pre-paid cards. That’s the software side. Using an NFC chip embedded in a phone, you tap a pay terminal. No swiping your card. That’s the hardware side. On the online side, it’ll seamlessly combine digital coupons that you collect—either from Google Offers or merchants themselves—and loyalty cards.

The perfect theoretical—literally frictionless!—transaction looks like this: You snag a Google Offer for $1 off a Frappucino at Starbucks. (Or if you don’t have an offer on tap, Google Shopper will show you a bunch nearby.) You go to the nearest Starbucks—pinpointed by Google, of course—and order your terribly sweet concoction. When you go to pay for your drink, you open the Wallet app, punch in your pin and tap the payment console with your phone. Instantly, your Google Offer coupon is applied, you’ve paid for your drink, and you’ve racked up points on your Starbucks loyalty card. And the receipt’s on your phone. That whole scene? That’s why tapping a Google Wallet phone is potentially more convenient than a plastic card. Not the lighter wallet. Deal + payment + loyalty in one tap.

What Google Wallet looks like today, though, is different. The Wallet app will hit Nexus S 4G phones on Sprint today—and only those phones for now. (Google promised an NFC sticker to enable non-NFC-packing phones to use Wallet, but isn’t saying anything else about it—specifically, when we might see one—now.) The system exclusively uses Mastercard’s PayPass terminals, deeply limiting the number of places you can use Wallet, though Google announced today it’s licensing NFC specifications from Visa, Discover and AmEx. (Basically, the only place it’s useful to me is in NYC cabs, since I don’t shop at American Eagle or Macy’s or practically any of the other big box stores partnering with Google.) And, to top it all off, it’s only Citi Mastercards that currently get the full benefits of Google Wallet—for now, to pay with anything but gift cards, you’ve basically gotta charge a pre-paid Google Card with money from your bank account through Google Checkout. All things that highly constrain just how convenient Google Wallet actually is today.

So my experience using Google Wallet is very much what I expect it to be for most people out of the gate: a novelty, mostly. At least after I loaded it up with money, which seems weird, like giving myself an allowance, because I couldn’t use it with my Wachovia credit card. I couldn’t use it with Google Offers, either, since I couldn’t find one for any of the stores that take Google Wallet. And I couldn’t use it with loyalty cards, since I don’t use have them for anywhere but independent coffee shops far, far away from Google and Mastercard’s radar. Which nixes half of what’s actually convenient about Wallet, since tapping after punching in your pin is no easier than swiping, in most cases.

You know where it was awesome though? In an NYC cab. Trying to dig your wallet out of your ass pocket while you’re sitting down, ripping the right credit card out of your wallet, trying to figure out where to swipe it, fumbling around with the card to get the stripe facing the right direction, going through the right number of menus, swiping at the correct speed, finally, and paying the damn cabbie after he tries to convince you his credit card terminal is broken is like, um, annoying. Google Wallet fixes that.

Wallet will fix a lot of things, perhaps sooner than you’d expect, even given how slow as the financial industry moves. Because money, infrastructure like this—new terminals in every store—is a scale game. Google’s got scale. Its partners, like Mastercard and Visa and Citi, have scale. They’re gonna need it to get people on board. But eventually it’s going to wash over everything like a wave. It’ll be on lots of phones. It’ll work with lots of cards and lots of banks. It’ll be in lots of stores. And then it’ll be just as natural as pulling out a card and swiping. Maybe more, since I have my phone out all the time anyway. Besides, it’s obvious this is just the beginning for Google. Google doesn’t just want to replace your credit cards—there’s a reason they’re calling it Google Wallet, not Google Money or Google Cards.

If you’ve got a Nexus S 4G on Sprint, well, welcome to the future, starting now.


Update: I didn’t really talk about security because I didn’t worry about it. Google Wallet’s pretty secure. You need a PIN to unlock the Wallet to pay for stuff. So if you lose your phone, without knowing your PIN number, it’s useless. The NFC chip itself is locked down hardcore. For instance, the chip is disabled whenever the display is off, so it can’t be skimmed. And the secure element is only turned on when the screen is on and Wallet is unlocked and ready for payment.