The mobile payments solution from the search engine and tech giant now has government protection.
Google Wallet, a smartphone based payment solution has now just become a little bit safer for customers in the United States who would like to ensure that their funds are secure, as there is now insurance news showing that government coverage will be protecting them.
The Federal Deposit Insurance Corporation (FDIC) will now be providing coverage to funds held in the mobile wallet.
A report recently published by Yahoo Finance announced this insurance news, in saying that the FDIC will become available on behalf of Google Wallet customers who have funds stored in their mobile payments accounts. This protection provides coverage for up to $250,000 should the financial institution ever collapse. In the past, that protection was available only to customers of banking institutions. However, there is no requirement for federal insurance for companies such as prepaid debit cards, payday lenders, and other types of “non-banking institutions”.
This insurance news has another twist to it, in the way that Google went about obtaining its FDIC coverage.
The company did not take the standard route of going directly to the FDIC in order to obtain its financial insurance directly. Instead, in a method that some are calling strange, but others are calling wise, it said that it would place the funds from Google Wallet into banks that already have FDIC insurance. That way, there is a form of indirect coverage for the funds in these mobile wallets.
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This additional insurance coverage helps Google to stand out from among many other mobile wallets that have entered into the technology space over the last few years. It isn’t as though Google is currently running the risk of drying up its funds, nor is it likely to suddenly take off with the money in its customers’ accounts. However, this may be appealing from a selling standpoint as one of the current barriers to adoption of this type of app is a concern over security. Every little bit of extra protection is appealing to many consumers, at the moment.
This insurance news makes it feel as though Google Wallets offer a safer experience than its rivals, regardless of whether or not that is truly the case. This represents a highly strategic move for the company.