An Aside on Mobile Wallet History (and how carriers negotiated with terrorists?)

(Okay, I’m kidding with the title, but you’ll see why I made the joke.)

The time: 2011-2012.

At this point, tap-and-pay was really just an artifact that you saw at places like CVS or Walgreens. It was nothing new (I remember having a tap and pay card back in 2007 with Wells Fargo), but arguably it had failed to capture much of an audience. It was supposed to be more convenient here in the US, but people be stuck in their ways.

Google, however, saw an opportunity. NFC began becoming a thing on phones in 2010, and Google themselves (along with Samsung making the device) had the NFC-enabled Nexus S in the same year. NFC was the same (if not similar) tech used for tap and pay for normal cards, so why not put two and two together and make a mobile wallet that leverages this technology so you can just keep all your cards on your phone? And it was thus: Google Wallet.

To quote Egoraptor: FSCKING GENIUS

The problem was that it needed to be secure, and at the time, the only way to really achieve that was the implementation of something called a secure element which was a hardware feature added to certain phones. This–unfortunately–meant that not every phone could use Wallet. But this was the cusp of some crazy new tech, so a limited rollout wasn’t exactly unexpected. The secure element–or lack thereof–will become relevant in a bit.

The way Wallet worked in practice was also absolutely genius: Instead of trying to negotiate with banks and drag them kicking and screaming into the future…Google had a virtual card (not to be confused with the virtual prepaid card you also got in Wallet, but more of that later) that would be charged at the time of purchase. Google would then charge whatever card was on file. So you could use whatever card you pleased with Wallet because to your bank it just looked like you were paying Google for something rather than using your card at an establishment. Google just acted as a proxy sitting between the establishment and your actual bank card. You were also given a virtual prepaid card that you could load funds to. 

While Google Wallet first supported the Nexus S 4G, the Galaxy Nexus was the phone that was supposed to launch with it and a big deal was made of it. At least among the tech blogs at the time.

The problem was that for at least a few months in the US, Verizon was the only carrier (and only place) you could buy the Galaxy Nexus from. This is before Google went whole hog on selling phones direct to consumers (which began in 2012 with the Galaxy Nexus GSM and later the Nexus 4. They sold direct to consumers before, but…it kind of flopped). Verizon was also working behind the scenes with AT&T and T-Mobile on a competing mobile wallet, and as such had a vested interest in keeping Google Wallet from gaining a foothold. So Verizon alleged that they just couldn’t allow Google Wallet on their Galaxy Nexus because it lacked the secure element to make it work.

The fun part? This was complete bullshit on Verizon’s part because so long as you just sideloaded the APK for Wallet, it actually did work! But Verizon–again having a very vested interest in stopping Google–went to great lengths to stop this. The Galaxy Nexus on Verizon had a secure element, but Verizon also didn’t like Google having full control over it. (Because that was part of the deal with Wallet. If you used it, it wanted full control of the element, arguably for security reasons.)

Enter ISIS Wallet

…and now you see why I made the joke I did.

ISIS Wallet was the name that the carriers (in this case, T-Mobile, Verizon, and AT&T) went with for their competing service. It was supposed to work like Google Wallet, but, of course, was far inferior in practice.

Remember how I was talking about how Verizon was going on about not wanting Google to have control over the secure element in the Galaxy Nexus? Turns out they didn’t even need it. Because to use ISIS Wallet, you got a different kind of secure element: The SIM card. 

To sign up, you actually had to go to your carrier and get a special ISIS SIM card that contained a secure element for use with ISIS Wallet. And at least on T-Mobile? That was going to cost you because T-Mobile charged for SIM replacements (and still does!) Not only that, but ISIS was very, very limited in what it could do. It used the same terminals as Google Wallet, but card compatibility was very limited and you had to sign up for for an AmEx Serve card if you didn’t have a compatible card. 

(Again, compare and contrast to Google Wallet where you could use whatever card you wanted, Google just gave you a proxy card for incompatible cards that would forward charges to your actual card. And you got a prepaid card, standard. No extra sign-ups required. Hell, even before that, if you had a compatible phone for Google Wallet, you just signed up from your phone. No need to go to a carrier store and get your SIM replaced. The whole set-up process with ISIS had way, way too much friction and surprise, no one wanted to deal with it.)

As if that wasn’t enough, ISIS spent a lot of time (and I mean a lot) being on trial in Austin, TX and Salt Lake City, UT.

The whole thing was a huge mess from top to bottom and as Google Wallet gained more and more steam and cast away more and more of its (relatively few) issues, ISIS kind of just faded into the background. It was still there, but relatively few paid it any mind.

They did read the room and realized just how bad their name was, so it was changed to Softcard, but it was a short lived time before–ironically–Google absorbed Softcard.

And then…Apple Pay

I mention Apple Pay because when it was introduced, it really was a huge shift in the mobile wallet space. When Apple throws its weight behind something like this, Shit Is Going To Get Real.

And get real it did, and not in the good way. Up until Apple Pay launched, stores were fine leaving the NFC terminals installed. People rarely used them, and they were left for the few that did. Even at its peak (and before being turned into Android Pay), Google Wallet didn’t have a gigantic install base, so it still went relatively unnoticed by most retailers.

Apple Pay turned all of that on its head because Apple Pay was going to be huge. It debuted on one of the most popular iPhone models and with Apple’s marketing a good lot of people were going to be using it. Apple Pay’s privacy features (specifically how it anonymizes the person making the payment) really ruffled some feathers with the retail sector.

So they fought it. Rite Aid, CVS, and other retailers famously went scorched earth on their NFC terminals that were previously just fine, and a bunch of retailers got together and tried to push their own payment systems. Walmart did theirs (and as far as I know, still does), others went with something called CurrentC, but all of these shared the same flaws: No privacy, they used QR codes for payment (fun!) and of course lacked on the privacy. Oh, and they required direct access to your bank account. So any breach was going to be absolutely catastrophic. Fun!

Being a Wallet user at the time, this sucked, of course. Because now all those NFC terminals I once used? Gone. Because by god, these retailers are gonna stick it to Apple!

…except as we know now, here in 2021…they weren’t exactly successful and Apple Pay/Google Pay/Samsung Wallet and the like all remain the go-to options for mobile wallets.

Thank fsck the retailers and carriers (and their half-assed products pushed by way of unfair competition) lost this battle.



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