UPDATED: Verizon not preloading Google Wallet on Galaxy Nexus smartphone


Verizon Wireless (NYSE:VZ) will ship the Android-powered Galaxy Nexus smartphone without preloading the Google (NASDAQ:GOOG) Wallet tap-and-pay application.

"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," Verizon Wireless spokesman Jeffrey Nelson said in a statement.

However, Google said in a statement,"Verizon asked us not to include [Google Wallet] functionality in the product," without elaborating on the rationale behind the carrier's decision.

Verizon Wireless is slated to begin selling the Samsung-produced Galaxy Nexus later this month, reportedly at a price of $299.00. A Google spokesperson told the Journal that Verizon subscribers also would not be able to download the Google Wallet application from Android Market, but another unnamed source claims the operator won't prevent consumers from obtaining the solution via the Google storefront.

The Near Field Communications-based Google Wallet enables consumers to make purchases and collect or redeem offers by tapping their Android smartphone at 300,000-plus MasterCard PayPass-enabled merchant terminals. Google Wallet is presently available across all Sprint Nextel (NYSE:S) Nexus S smartphones running Android OS version 2.3.4. For now, only PayPass-enabled Citi MasterCards may be loaded to Google Wallet--consumers may also fund the Google Prepaid Card with any existing payment card. Debit cards are not eligible for Google Wallet at this time.

In October, Google Wallet expanded beyond point-of-sale purchases by introducing support for SingleTap, which enables consumers to redeem coupons and/or earn rewards points with one tap of their phone. Google Wallet users can now enter select U.S. retailer partners including American Eagle Outfitters, The Container Store, Foot Locker, Guess, Jamba Juice, Macy's, OfficeMax and Toys"R"Us to instantly save on in-store offers. Google is also partnering with the state of New Jersey to enable tap-and-pay rail and bus transit purchases at select locations.

Verizon Wireless is partnering with AT&T (NYSE:T) and T-Mobile USA to mount Isis, a rival NFC-enabled m-commerce network slated to begin commercial trials in early-to-mid 2012. Like Google Wallet, Isis promises services enabling consumers to conduct point-of-sale transactions, redeem coupons and use store merchant loyalty cards via mobile device. Isis has pledged to open its system to all interested credit issuers and banks; in July it welcomed financial services providers Visa, MasterCard, Discover and American Express to its ranks.

Availability across a diverse array of operator networks and handsets is imperative for services like Google Wallet and Isis to achieve critical mass. Six device manufacturers--HTC, LG, Motorola Mobility (NYSE:MMI), Research In Motion (NASDAQ:RIMM), Samsung Mobile and Sony Ericsson--have committed to introducing NFC-enabled devices that support Isis. Google Wallet will face an uphill battle if Sprint remains the sole major U.S. operator supporting the service.

For more:
- read this Wall Street Journal article

Related articles:
Google Wallet rival Isis confirms support for Android
Google Wallet merges with Google Checkout to streamline shopping
Google Wallet expands to tap-and-pay ticketing with NJ Transit partnership
Google Wallet adds support for SingleTap coupon redemption
Google Wallet launches in New York, San Francisco

Correction, Dec. 6 2011: Verizon spokesperson Jeffrey Nelson issued a statement that Verizon did not block Google from preloading Google Wallet onto its Galuxy Nexus smartphones and is currently working with Google to find a new, secure way to integrate the app onto its phone hardware.