There have been numerous money transfer services that have popped up, the majority do not offer any kind of federal-level insurance. Google Wallet, was no different, until today that is. According to Yahoo Finance, Google is adding FDIC insurance to the money you keep in the Wallet balance, by storing your funds in various FDIC insured banking institutions.
The current Terms of Service clearly state that funds held by GPC (Google Payment Corp.) are not insured by the FDIC, a Google spokesperson reportedly confirmed that this policy has changed. It is not clear when the policy changed, or when the Terms of Service will be updated to reflect, regardless, if you were to have a need to store large amounts of money, you should be protected if something were to happen to Google.
The move helps set Google Wallet apart from competitors, namely PayPal. PayPal stands by being categorized as a “non-banking institution”, which does not legally require them to have FDIC insurance. Essentially with PayPal’s current user agreement you’re lending them money, for free, and it is completely unsecured.
Google does so many other things so well, Wallet is a service that has not caught on as well as one would have expected, even more so now with Apple Pay. Perhaps with the increased security of transactions Wallet can start making a bigger presence in the mobile market.
