MOUNTAIN VIEW, Calif.-A fresh update to Google's mobile wallet allows users to make payments from any credit or debit card, a move that fundamentally changes the company's approach to working with issuing institutions.

Until the change, Google required issuers to partner with it before presenting their cards as an option to consumers within its mobile wallet. At Google Wallet's launch last year, only Citigroup had entered into this type of arrangement, and today Citi remains the only bank partner Google has announced.

The new setup allows consumers to link any Visa, MasterCard, American Express or Discover card to a virtual MasterCard account issued by The Bancorp Bank. To an end-user, it would appear that the cards are directly available on the phone, without having to pass through a separate account.

"What we are doing, as a part of [this announcement] is making it easier for issuers to push their cards into the wallet," Robin Dua, head of product management for Google Wallet, told American Banker, an affiliate of Credit Union Journal. "We have simplified the integration experience."

The New Model

Google allows banks to upload card art and ease integration by filling out an online form. Google does not charge for this service. Google is also launching a set of "lightweight" application programming interfaces for banks.

Under this new model, "linked" cards take a cloud-based approach to security. Google stores each card's details on a server it controls. This boosts security by allowing users to manage their payment details without needing to be in possession of the Wallet-enabled phone. "We have enabled a feature that is called the Cloud-Based Kill Switch," said Dua. If users lose "their phone they can disable the wallet. What this feature does is it actually wipes all the info in the phone."

With the cloud-based wallet, Google acts as the merchant of record. It presents only the virtual card number to brick-and-mortar retailers. However, Dua told American Banker, issuers still receive the transaction data from Google Wallet purchases.

With the directly enabled Citi card or Google's prepaid card, Google still presents the actual account number to merchants.

The new feature builds on Google's acquisition of the prepaid card processor TxVia. Google's change to its mobile wallet model may have been inevitable, says Aaron McPherson, a research manager for payments at IDC Financial Insights in Framingham, Mass.

"I figured that they would probably go to a cloud model pretty soon," he says. "They really hadn't moved forward very far since their announcement last" year.

Now, McPherson says, Google doesn't need to partner with banks to enable its digital wallet.

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