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Google did something bold last night. They unveiled a new version of the failed Google Wallet application that no longer needs NFC to work. It’s also compatible with every Android phone running 2.3 Gingerbread and above, which for all intents and purpose is every Android phone currently in use in the United States. The Google Wallet app will also now allow you to send money to anyone in the US, so it’s kind of like PayPal now too. But all of this should make you ask why?

Why was the NFC requirement removed? Because NFC is fundamentally broken. It’s a protocol that’s become far too political. Your operator, your handset maker, your bank, and various online services have fought each other over the years to gain control of the NFC element in your phone because they want a cut of every transaction you make.

Why has compatibility with Android 2.3 been added? Because as ubiquitous as PayPal is, Google can do something that PayPal can’t: Bundle Google Wallet with every Android phone on the market.

Does this decision have anything to do with the recent acquisition of Bump? While Google isn’t going to admit that, my gut tells me yes. It only makes sense. Instead of trying to get payments and transfers working via NFC, just bump two devices together and you’re golden.

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