Verizon Wireless clout blocks Google Wallet

NEW YORK – Verizon Wireless is blocking Google’s new flagship phone from supporting Google’s attempt to make the smartphone the credit card of the future.

In blocking the Google Wallet software from running on the new Samsung Galaxy Nexus, Verizon Wireless said last week it was holding off on providing a wallet application until it can offer “the best security and user experience.” Verizon and rivals ATT Inc. and T-Mobile USA are part of a consortium called ISIS that is planning its own payment system.

Google confirmed that Verizon had asked it not to include the wallet function in the Galaxy Nexus phone, due out soon.

The way Google Wallet is supposed to work, the phone can be used to pay for merchandise in some stores, by tapping it to payment terminals.

Google calls the payment application a “wallet” because it can be loaded with payment “cards” from multiple sources. Right now, there are only two cards available: Citibank MasterCards and a prepaid card issued by Google. But Google is making the wallet available to any financial institution that wants to participate.

Google’s plan is to make money by acting as a conduit between merchants and shoppers, using the Wallet as a way to deliver advertising and coupons. It’s competing not only with ISIS, but with Visa and MasterCard, which have their own wallet projects, and with eBay Inc.’s PayPal.

The Galaxy Nexus is the latest iteration of the Nexus line, which showcases new features and capabilities for phones running Google’s Android software. In this case, the phone is the first to run a version of Android, dubbed “Ice Cream Sandwich.”

The previous Nexus phone, sold by Sprint Nextel Corp., is the only phone yet to work with the Google Wallet application. Sprint is not part of ISIS.

U.S. phone companies effectively have veto rights on features sported by the phones they sell.

Because of the clout Apple Inc. has gained by making the world’s most popular smartphone, it has been able to turn that around and dictate terms to carriers.

Google doesn’t have the same leverage. It tried selling the first Nexus phone on its own, without going through the carriers, but ended that experiment because of weak sales.

Congress and regulators have occasionally raised questions about carriers blocking specific third-party applications. These days, carriers generally don’t block applications directly, leaving it to Apple and Google to police their app stores.

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