Google Wallet mobile payment system now insures users' money to protect them against fraudulent account activity AND company bankruptcy
- Google spokesperson confirmed current policy changed meaning funds will be protected by the Federal Deposit Insurance Corporation
- As a non-banking institution, Google Wallet, along with competitors PayPal and Venmo, is not legally required to be federally insured
- With the new change to its policy, funds in Wallet Balance are protected if anything were to happen to the company like bankruptcy
Google Wallet says it has changed its policy when storing users' funds as they will now be federally-insured (file photo)
For those who use Google Wallet, their money just became safer with federal-level insurance.
Google confirmed to Yahoo Finance in a statement that its current policy changed - meaning the company will store the balances for users of the mobile transfer service (similar to PayPal and Venmo) in multiple federally-insured banking institutions.
This is good news for people who place large amounts of money in their Wallet Balance because the Federal Deposit Insurance Corporation insures funds for banking institutions up to $250,000.
Currently, Google's user agreement says funds are not protected by the FDIC.
However, a Google spokesperson told Yahoo Finance that the current policy has changed.
The policy states that 'funds held by Google Payment Corp. or its service providers (including any bank service providers) in connection with the processing of Payment Transactions are not deposit obligations of Buyer, and are not insured for the benefit of Buyer by the Federal Deposit Insurance Corporation or any other governmental agency', according to 9to5.
Share this article
As a non-banking institution, Google Wallet, along with PayPal and Venmo, is not legally required to be federally insured.
But with the new change to its policy, funds in Wallet Balance are protected if anything were to happen to the company like bankruptcy.
For example, for those who use mobile payment services where funds are not FDIC insured, if a company files for bankruptcy, the user would become their creditor and would be required to go through bankruptcy court to get their money back.
But for users with FDIC insurance, they would receive their money from the government in a matter of days, according to Yahoo Finance.
Details on when Google Wallet's user agreement will be updated were not provided.
GOOGLE WALLET USERS NOW HAVE FDIC-INSURED FUNDS
How Google Wallet works:
Google Wallet, launched in 2011, stores credit and debit card information, and lets shoppers pay for goods by tapping their phones against special terminals at store checkout counters.
It works with any debit or credit card, on every mobile carrier.
The service allows users to send money to anyone in the US with a Gmail address, or request money on-the-go, directly from their bank account, debit card or Wallet Balance.
Users can spend received money through the service in stores or withdraw cash from ATMs with the Google Wallet Card, as well as transfer the funds directly to their bank account.
It comes with 24/7 fraud monitoring, and users can disable their Wallet app or card from their Google Wallet account if they're ever lost or stolen.
Source: Google Wallet
Earlier this month, a federal judge rejected Google Inc's request to dismiss a lawsuit accusing the technology company of invading the privacy of users of its Google Wallet electronic payment service by sharing their personal information with outside app developers.
The judge said Google must face claims it breached users' contracts, violated the federal Stored Communications Act which limits disclosure of electronic records, and violated a California consumer protection law.
Judge Beth Labson Freeman in San Jose, California said Google Wallet users may try to show that Google 'frustrated' the purpose of its own privacy policy by allowing 'blanket, universal disclosure' of their personal information to app developers whenever they bought apps in Google's Play Store.
The lead plaintiff is Alice Svenson, an Illinois resident who said Google sent unnecessary personal information about her to YCDroid when she paid that developer $1.77 for an email app.
She said Google raised the risk of identity theft by routinely sending information about Google Wallet users such as addresses and zip codes, phone numbers and email addresses to app developers.
Svenson said the Mountain View, California-based company ceased the practice soon after the lawsuit was filed in September 2013.
Her lawsuit seeks class-action status, damages of $1,000 per violation, punitive damages and other remedies.
Most watched News videos
- Knife-wielding man is seen chasing civilians inside Bondi Westfield
- Bondi Junction knifeman is seen ordering curry hours before attack
- Wind and rain batter the UK as Met Office issues yellow warning
- Incredible drone footage of Charmouth Beach following the rockfall
- 'Declaration of war': Israeli President calls out Iran but wants peace
- Crowd chants 'bring him out' outside church where stabber being held
- 'Tornado' leaves trail destruction knocking over stationary caravan
- Incredible drone footage of Charmouth Beach following the rockfall
- Israeli Iron Dome intercepts Iranian rockets over Jerusalem
- 'Oh What A Night' song interrupts BBC radio Israel-Iran tension talks
- Police provide update on alleged Sydney church attacker
- Proof of Worcestershire panther? Motorist spots 'big cat' in a field
