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The Mobile Wallet Wars Begin

Since launch Google Wallet has been available on the Samsung Nexus smartphone offered by Sprint, but when Verizon started offering the same device at the end of 2011 they blocked the Google Wallet application.

A Google spokesman first announced that the company was asked “not to include” the Google Wallet functionality by Verizon Wireless. Verizon responded saying “Google Wallet needs to be integrated into a new, secure and proprietary hardware element in our phones.” While this statement by Verizon is true, and the hardware they are referring to is known as the Secure Element, it does not explain whether there are issues integrating this functionality with Verizon phones or specifically why Verizon is not allowing customers to install Google Wallet on their mobile devices.

Google Wallet partnered with Sprint and their Samsung Nexus S is currently the only phone that supports Google Wallet. Verizon, AT&T and T-Mobile are working on a mobile wallet of their own, called Isis, which will launch in two pilot markets later this year. Verizon’s decision to not allow Google Wallet on their devices was clearly made to benefit Isis, although it should be noted that AT&T allows Google Wallet to work on their Samsung Nexus devices. Google gained the first mover advantage launching their mobile wallet last September, but members of Isis may try to limit that advantage keeping Google Wallet off their devices as long as they can, or at least until Isis launches.

In response to Verizon’s decision to block Google Wallet the director of Stanford Law School’s Center for Internet and Society, Professor Barbara van Schewick, wrote a letter to the FCC calling on them to investigate the situation. In the letter she wrote that Verizon blocking Google Wallet hurts competition and innovation in the mobile payments market and that it undermines the FCC’s general approach towards mobile Internet openness.

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