With electronic payment options like Google Wallet and PayPal growing in popularity, more consumers are storing money in those accounts. What those consumers might not have realized is that those funds, unlike if they were kept in a bank, were not FDIC insured. Recently, however, Google announced that money in Google Wallet accounts will now be FDIC insured.
What does it mean to be FDIC insured? The Federal Deposit Insurance Corporation was founded during the Great Depression and insures savings and deposits at banks up to $250,000. This is great for average folks, because banks don’t have a perfect record of keeping money safe.
Now, the same goes for savings and deposits in Google Wallet accounts. More accurately, Google Wallet itself is now holding those funds in FDIC-insured banks, according to a Google Wallet spokesperson. But either way, the direct effect on users is the same.
While most users might not even notice this perk (and hopefully they’ll never need to use it), it’s nice to have some added peace of mind. While Google Wallet is intended as a system for transferring money between users and not storing it, money can be left in a Wallet Balance in between transactions.
PayPal and other apps like Venmo do not store user funds in FDIC-insured institutions, and don’t publicly specify where they do store the money. As long as users simply transfer money rather than storing it with these apps, they should be fine.
Beyond benefits to the consumer, news of Google Wallet’s FDIC insurance is evidence of increasing industry acceptance for electronic and mobile systems. Google Wallet is no longer a novelty, but a well-established member of the payments industry. Consumers can expect continual improvements in safety and security as the mobile payments industry progresses.
Be sure to continue following PayProTec for coverage of similar developments. We’ll make sure you stay current with mobile payments industry news.