Two-thousand and twelve was so supposed to be the year of the digital wallet. And Google was supposed to lead the way. But it looks like the Google Wallet app has gotten off to a bumpy start.

Six months after Google introduced Google Wallet, the app, enabled by near-field communications, or NFC technology, is still struggling to find carrier and device partners, as well as, retailers willing to support the new technology. And last week, the company temporarily took part of the Google Wallet application offline while the company figured out how to fix a security issue.

Could Google Wallet soon go the way of other interesting Google pet-projects like Google Labs, Google Health and Google PowerMeter? Those programs were all canceled after Google's CEO Larry Page said the company needed to focus on its core business and "put more wood behind fewer arrows."

"Google often jumps head-first into new projects, paddles around, and then decides whether it's worth staying in," said Michael Gartenberg, an analyst covering mobile for Gartner. "I don't think Google would pull the plug on Google Wallet entirely, but they may be slowing down and regrouping."

Will security be Google Wallet's downfall?
Indeed, this makes sense given that recently discovered security flaws may have spooked some consumers.

On Friday, Google temporarily disabled the ability to set up new prepaid cards in its Google Wallet app after it was discovered that if someone lost his Google Wallet-enabled phone and the screen of the device wasn't locked that someone finding the phone could reset the PIN and gain access to whatever money was left on the Google Prepaid card.

The way that Google Wallet works is that it stores a user's credit card information, as well as information for a prepaid Google payment card, in a digital app on the phone. Subscribers can use any of the credit cards stored in Google Wallet or the prepaid card when checking out at a store by tapping their phones to a payment terminal.

Even users who cleared their Google Wallet app from the device still left behind the prepaid balance on that particular phone because it was stored to the secure element on the device, the company said.

Osama Bedier, vice president, Google Wallet and Payments, said in a blog post Friday night that part of the app had been disabled, but that it would be restored once a permanent fix to the security flaw has been found.

"To address an issue that could have allowed unauthorized use of an existing prepaid card balance if someone recovered a lost phone without a screen lock, tonight we temporarily disabled provisioning of prepaid cards," he said. "We took this step as a precaution until we issue a permanent fix soon."

Gartenberg said that it was a good idea for Google to disable this functionality and make sure the security flaw is eliminated before allowing more people to sign up for the app, even though the flaw itself is not a major risk.

"The perception of security is a big deal when you're trying to get people to sign up for a new service like this," Gartenberg said. "And Google can afford to take time to regroup and make sure the security is nailed down."

Google maintains that security on the Google Wallet is solid. And it claims that using the app can be even more secure than using a regular credit card.

"People are asking if Google Wallet is safe enough for mobile phone payments," Bedier said in his blog post. "The simple answer to this question is yes. In fact, Google Wallet offers advantages over the plastic cards and folded wallets in use today."

http://news.cnet.com/8301-30686_3-57377070-266/could-google-wallet-be-googles-next-failure/