Google Wallet is Google's competitor to money transfer services such as PayPal and Venmo, but all three of these services have one thing in common. None of them are FDIC-insured. Soon though, according to Yahoo Finance, this will be changing for Google Wallet. First off, what is FDIC and what does being insured by it entail? FDIC stands for Federal Deposit Insurance Corporation and it was established back in 1933 by the US government. More specifically, the FDIC came about as part of the Banking Act of 1933. Banks typically have their customers money insured via FDIC for up to $250,000 in case said banks fall through and lose their customers money. So, as you can see, wherever you may be storing your money, you would want that business to be FDIC-insured.
That is exactly what Google will soon be implementing with their Google Wallet service. And while this is definitely significant news it is not as needed here as a company such as a bank. This is due to the fact that Google Wallet is a service that users mainly use to transfer smaller amounts of money between one another or to make smaller purchases here and there. Rarely do users store large amounts of money within their Google Wallet. Nevertheless, this is still a big deal and Google Wallet users should feel that their money is much safer now because it is. Well, it will be very soon anyways.
A Google spokesperson confirmed to Yahoo Finance that the company has made a change to their Google Wallet policy pertaining to being insured by FDIC. More specifically, that Google Wallet funds will now be stored in banks that are all FDIC-insured. When this policy goes into effect, if it hasn't already, it will mean that users money stored in Google Wallet will be insured and safe. This will give Google Wallet a pretty big leg up over competing services like PayPal who are not FDIC-insured. The Google spokesperson, unfortunately, did not give any further details on the matter. And, if you take a look at the current Google Wallet user agreement, it still states specifically that the service is not FDIC-insured. When this will change is still unknown at this point in time, but the Google spokesperson did point out that their internal policy has already changed. This tells us that Google Wallet should be FDIC-insured in no time.