Is Google Wallet Going To Die Before It Even Has A Chance?

android, google wallet, sept 2011, bi, dng

[credit provider=”Daniel Goodman / Business Insider”]

Yesterday we learned that Google Wallet won’t be available on the new Galaxy Nexus once the phone launches on Verizon.That’s a big problem for Google Wallet. If it’s not on phones, it’s going to bomb.

So the big question is this: What happens if T-Mobile and AT&T decide to follow Verizon’s example and decide to block Google Wallet?

Neither company will elaborate beyond their prepared statements. (See them below.)

Right now, Sprint, the third-largest carrier with ~50 million subscribers, is the only carrier that supports Google Wallet. That’s 50 million versus Verizon’s ~107 million, AT&T’s ~100 million, and T-Mobile’s ~34 million.

If the other three carriers decide to stick together and ban Google Wallet in favour of their own ISIS, you can kiss Google Wallet goodbye.

A little background:
Here’s what Google had to say to us regarding the controversy:

Verizon asked us not to include this functionality in the product.

Ok, so that means it’s Verizon’s fault. Besides, everyone knows Verizon, AT&T, and T-Mobile are collaborating on their own mobile payments service called ISIS. Why let in a competitor on their own network?

But Verizon released an odd statement saying it isn’t over for Google Wallet on its network, offering a tiny ray of hope:

Recent reports that Verizon is blocking Google Wallet on our devices are false. Verizon does not block applications. 

Google Wallet is different from other widely-available m-commerce services. Google Wallet does not simply access the operating system and basic hardware of our phones like thousands of other applications. Instead, in order to work as architected by Google, Google Wallet needs to be integrated into a new, secure and proprietary hardware element in our phones. 

We are continuing our commercial discussions with Google on this issue.

There are a few concerning things here.

First, let’s go over the technical reasons for Verizon blocking Google Wallet. It says Google Wallet needs a “secure and proprietary hardware element.” Doesn’t the Galaxy Nexus already have that in its NFC chip? When Google first demoed Google Wallet last spring using the Nexus S, it said everything was completely secure on the hardware. Why would Verizon say otherwise? Why would Verizon need to concern itself with hardware like this? (Answer: It doesn’t.)

Next, Verizon keeps referring to the phones it supports (in this case, the Galaxy Nexus) as “our phones.” That’s scary. It’s not Verizon’s phone. It’s Samsung and Google’s. Verizon is the carrier partner. All it needs to concern itself with is that the hardware is secure and adequate enough to provide customers with a good experience. It shouldn’t be concerned with perfectly legitimate apps like Google Wallet.

Finally, Verizon is blocking Google Wallet. The first sentence of the statement is misleading: “Recent reports that Verizon is blocking Google Wallet on our devices are false.” This may be technically true, as Verizon claims it is still in discussion with Google to possibly bring Wallet to the Galaxy Nexus. But for now, Verizon is blocking it.