Is Google Wallet Geared Toward Small Biz?

Recently, Google announced that it would phase out its Checkout product in favor of its new, shiny Google Wallet platform. Wallet is designed both for online payments, the way Checkout was, as well as mobile payments at select retailers.

Google WalletNote that I said “select.” Right now Google’s focus seems to be big box stores. When I searched for participating retailers in my area of San Diego, stores like New York & Company, Best Buy, Footlocker and 7 Eleven popped up. It’s unfortunate, because I think this could be a fantastic tool for small businesses. Anything that makes it easier for customers to pay businesses is usually good news for small biz, but the process of signing up as a retailer to accept Wallet is more daunting than the typical DIY approach of Google. The merchant site is geared much more toward national retailers than small businesses:

“How does a company partner with Google for Google Wallet?  At least for now, a partner must engage directly with Google to build products or services that connect to Google Wallet. If you’re a business interested in partnering with Google Wallet, contact us.”

It’s unclear how much of an up-front investment is required. Online, the integration is as easy as it was with Checkout:  just like with Paypal, you insert some code on your site or use Wallet’s integrated services to let customers pay through Wallet.

Fees for the service vary, depending on how much revenue you bring in. For online and off, if you bring in under $3,000 a month or less, the fee is 2.9% + $.30 per transaction (competitive with Paypal). For transactions of $3,000 to $9,999, the fee drops slightly to 2.5%+ $.30, and so on.

Will Google Succeed in the Payment Space This Time Around?

Never heard of Google Checkout? You’re not alone as it has had a low profile

So this begs the question: how much more successful will Google be by offering mobile payments, especially when so few retailers offer it?

And for that matter, are we in the United States even ready for mobile payments? We’ve been salivating over how successful mobile payments have been in Asia and Europe, but there’s still an awkward disconnect among users, the phones offering the applications, and retailers actually accepting mobile payments, not to mention how the banks feel about losing transaction fees to smaller players in the mobile payment space. Paypal has thrown its own hat in the ring with Text to Buy services, but again, we’re simply not seeing widespread adoption.

Currently, only the Sprint Nexus-S 4G phones have the Wallet app, so we’ll be waiting a while before more popular phones carry the feature. This alone tells me growth of this service will be very slow, as customers won’t buy a specific phone just to be able to use Google’s Wallet app.

What the Change Means for Small Business

If you use Google Checkout to collect payments online, you don’t need to do anything immediately, though you will be asked to update the logo to the new Wallet version soon. You’ll be able to log into your account with the same credentials as you did with Checkout.

If you’re wondering if you should invest in a point-of-sale system to start accepting Google Wallet payments at your location, my thought is that it’s not imperative at this point (although if you’re in the San Francisco area, I bet you’d be in good company, as they’re always early adopters to Google technology).  

It’s not clear whether the equipment you’d need to get started is typically free, but the Wallet site for merchants states that Google has partnered with First Data to offer a special Mobile Starter package, which includes up to $100 of free processing and a free contactless PIN Pad to accept payments.

I’d love to see Google push this product toward small businesses. It would give smaller players the opportunity to connect with customers in new ways.


Susan Payton Susan Payton is the Communications Manager for the Small Business Trends Awards programs. She is the President of Egg Marketing & Communications, an Internet marketing firm specializing in content marketing, social media management and press releases. She is also the Founder of How to Create a Press Release, a free resource for business owners who want to generate their own PR.

9 Reactions
  1. I’m still incredulous that people will want to submit payments via mobile until security makes greater advances. Losing a phone is bad enough, but can you imagine if it meant your credit card information was out there with it?

  2. People lose their wallets everyday too! That hasn’t stopped anyone from storing credit cards there. Mobile payment may offer greater security.

  3. I agree that it sounds like an absurd idea in theory, but people have grown to really trust and rely on the internet for daily transactions and this translates into mobile internet as well. I see this being a huge success.

  4. Great article, Susan. Thank you. I’d like to offer some perspective from First Data, if I may.

    If the focus seems like it’s on large retailers, it’s simply because these retailers are more likely to have contactless terminals in place. Google Wallet is compatible with existing contactless payment terminal, so if a merchant already accepts contactless payments such as MasterCard PayPass, they can accept Google Wallet.

    And we agree that Google Wallet can be a fantastic tool for small businesses, which is why we have the starter package available for small merchants.

    With respect to Robert’s comment about security, it’s important to know that your payment credentials aren’t stored on the phone in the same way as your email, apps and music, for example. Payment credentials are stored in a computer chip called the Secure Element, which is essentially a self-contained computer that is isolated from the phone’s main operating system and hardware. Only trusted programs like Google Wallet can access the Secure Element to initiate a transaction. You can’t transmit payment credentials without entering a PIN, so if somebody found your lost phone, they wouldn’t be able to use it to pay without your PIN. Of course, if you did lose it you’d still want to report the loss to your financial institution just as you would if you lost a credit or debit card.

    There’s a Google Wallet merchant FAQ at and if you have other questions about Google Wallet, you can ask First Data on Facebook at

    Glen Turpin
    Director of Communications
    First Data

  5. I’d use it. There are passwords to get to the info, and it’d be just like losing a card. You call your bank and tell them to kill that number. This is everyday life in Asia. Why can’t we get it??

  6. @Glen–
    Thank you so much for the info! Much appreciated.

  7. Susan,

    In general, Google seems to make lots of home runs.

    Google Wallet doesn’t feel like their next one.

    The reasons you stated kind of convinced me.

    That, and I’ve never, ever heard the words, “Google Wallet” mentioned in a conversation.


    The Franchise King®

  8. Think about all the phones that have been hacked lately in the news. Now add the functionality of being able to steal money from you, makes it even a greater motivator for a hacker to get at your phone. Plus think about the practicality of actually trying to use the Google Wallet. Pulling your phone out, turning it on, finding the app, loading up, then putting in a security code, then swiping it, then killing the app. Or just get wallet out swipe credit card, put away.