- Funds left in Google Wallet have become insured by the Federal Deposit Insurance Corporation (FDIC), according to Yahoo Finance.
- Used mostly for direct payments like a prepaid credit card, most mobile payment services like Venmo and PayPal aren’t typically a place to store money, and many so far have not been insured.
- The FDIC insures consumer bank accounts up to $250,000.
Mobile payments service Google Wallet is looking more like a mobile bank with a move to insure account balances stored in its Wallet Balance under the FDIC. FDIC insures consumer bank accounts up to $250,000, but has so far treated mobile wallet services differently from deposit accounts since they are used mostly for money transfers instead of storage.
While Google hasn’t updated its user agreement, a spokesperson confirmed that Wallet balances will be held in FDIC-insured banking institutions to protect users’ money should the company suddenly be unable to release the funds itself. While bank runs requiring FDIC assistance are rare, consumers appreciate the the agency's stamp of approval.
Rival PayPal says that while it is not intended to be used as a bank, it complies with existing consumer protection laws covering unused balances held in accounts.