Google to bolster Wallet with TxVia buy

Google has broken out its chequebook and signed off on a new deal to acquire payments processing provider TxVia in a bid to bolster its Wallet product, which has recently taken a PR battering.

Google Wallet represents the search giant's push into the physical payments space in a bid to replace the physical wallet with an NFC-powered, Android smartphone. Google has teamed up with the payment industry's big end of town, including Citibank, Visa and Mastercard for credit card payments. It also issues its own prepaid cards for those who prefer an alternative.

Google wrote on its Commerce blog today that it had acquired TxVia to "complement our payments capabilities and accelerate innovation towards our full Google Wallet vision" while praising TxVia's achievements, which include the management of over 100 million customers and achieving certification with large global payment networks.

This established "a solid foundation for Google Wallet and our partners to drive innovation on a global scale and in a partner-friendly way," the web giant wrote.

TxVia carved itself a niche in platform-as-a-service-based payment processing technology for prepaid cards. The company said in a 2008 whitepaper advertising its services that there were many problems with resolving prepaid card transactions using existing credit and debit infrastructure, including heightened security issues, funds provisioning problems and speed of funds clearance.

TxVia marketed its own product as being designed to handle a vendor's entire prepaid ecosystem via a platform custom built for prepaid card management.

"With TxVia's platform-as-a-service [PAAS] delivery model, prepaid card processing can be completely outsourced to TxVia or deployed entirely in-house by the client, as well is in various hybrid forms that can evolve over time.

"PAAS offers an online platform, complete with the application development, data storage and other tools required to run multi-tenanted, massively scalable operations. Ours is the first and only PAAS solution for the prepaid card industry," the company's whitepaper read.

According to CrunchBase, TxVia's growth has been fuelled by four rounds of venture capital funding since 2007, totalling over US$55 million in raised capital. Google hasn't revealed the value of the deal, nor what it will use TxVia's technology for, but it's a fair bet that it will look to bolster its prepaid card offering following the PR beating it has taken in recent weeks.

One significant security hole was found in Google Wallet's prepaid card provisioning platform that saw the cards able to be re-provisioned to an unauthorised user, while another saw a security firm able to pull a PIN out of the handset so long as it is rooted.

Google is now looking to distance itself from rooted handsets, labelling those who root the device and use Wallet as "unsupported" users.

TxVia has today taken down information about its products from its website and replaced it with a message from CEO Anil D. Aggarwal, reading:

For more than five years, TxVia has been delivering ground-breaking processing solutions to enable new and increasingly complex forms of payment. We're delighted to announce that as of 2 April 2012, we are continuing that mission at Google.

Success in payments requires not only innovative technology and operational excellence, but also broad collaboration. As part of Google, we look forward to expanding our partnerships with both the payments industry and a wide variety of other organisations that are pioneering a new era of commerce.