Google Adds Visa, Discover, Amex to Wallet

Google's (GOOG) Wallet is getting thicker. The company is adding Visa, American Express and Discover to its payment system, which aims to make cellphones the credit cards of tomorrow.

Google Inc. on Monday said it has licensed the right to add virtual "cards" from the three payment networks to its Wallet application.

MasterCard Inc., the other major payment processor, is already part of the project. The Wallet application Google released on Monday, so far, only works on one Sprint smartphone. The Wallet can be loaded with a Citibank MasterCard or a prepaid debit card from Google.

With a card in the Wallet, owners can pay in stores by tapping their phones on wireless-capable payment terminals, instead of swiping credit cards. There are more than 135,000 such terminals in stores and other retail locations, but that's a small fraction of the total number of terminals.

Google's vice president of payments, Osama Bedier, couldn't say when cards from Visa Inc., American Express Co. and Discover Financial Services would work with the wallet. In the case of Visa, not only does Google need to work out the technical details of making its wallet compatible, it also needs to get the banks that issue the cards to sign on to the project, like Citigroup Inc. did for its MasterCard.

Google also needs more phones that work with the wallet. Bedier said Google is working with all major manufacturers of smartphones that run on Google's Android software to incorporate chips that communicate with payment terminals. Samsung Electronics Co. makes the Nexus S phone that works with the wallet today.

Visa plans to bring out its own, competing mobile wallet application. The competition isn't about getting a cut of the money that flows through the credit card accounts - Google isn't directly tapping into that stream - but about who gets to reach people when and where they shop. The applications are conduits for advertising in the form of coupons and loyalty cards. These opportunities are the real reason companies like Google and Visa are pushing to have cellphones replace credit cards.

Sprint Nextel Corp. is collaborating with Google, but the other three national wireless carriers - Verizon Wireless, AT&T Inc. and T-Mobile USA - have formed a joint venture to create their own digital wallet. They, too, are working with Visa, MasterCard, American Express and Discover.

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