One of the key things that led people to feel safe keeping their money in a bank rather than under the mattress at home was federal insurance on the money. The FDIC insurance that banks carry means that if they get robbed, you don’t lose your money or if the bank fails, they don’t take your money with them. Google has now landed FDIC insurance for Google Wallet.
What this means is that if you have funds in your Google Wallet account that are stolen. Most mobile wallet services like PayPal and others aren’t required to be federally insured since they fall into a category more like a prepaid debit card company than a bank.
In the past, the balances on Google Wallet weren’t federally insured, but a Google spokesman has confirmed the change. Google will now hold money left in Google Wallet accounts in multiple banking institutions that are FDIC insured.
For now, the user agreement with Google Wallet still states that the funds aren’t federally insured. Exactly when the user statement might be updated is unknown at this time. The cancels of Google failing and taking a user’s wallet cash with them are very slim considering its one of the largest tech firms in the world. It’s still nice to have the insurance.