Google Wallet says it has changed its policy when storing users ' funds as they will now be federally-insured ( file photo ) For those who use Google Wallet , their money just became safer with federal-level insurance . Google confirmed to Yahoo Finance in a statement that its current policy changed - meaning the company will store the balances for users of the mobile transfer service ( similar to PayPal and Venmo ) in multiple federally-insured banking institutions . This is good news for people who place large amounts of money in their Wallet Balance because the Federal Deposit Insurance Corporation insures funds for banking institutions up to $ 250,000 . Currently , Google 's user agreement says funds are not protected by the FDIC . However , a Google spokesperson told Yahoo Finance that the current policy has changed . The policy states that 'funds held by Google Payment Corp. or its service providers ( including any bank service providers ) in connection with the processing of Payment Transactions are not deposit obligations of Buyer , and are not insured for the benefit of Buyer by the Federal Deposit Insurance Corporation or any other governmental agency ' , according to 9to5 . As a non-banking institution , Google Wallet , along with PayPal and Venmo , is not legally required to be federally insured . But with the new change to its policy , funds in Wallet Balance are protected if anything were to happen to the company like bankruptcy . For example , for those who use mobile payment services where funds are not FDIC insured , if a company files for bankruptcy , the user would become their creditor and would be required to go through bankruptcy court to get their money back . But for users with FDIC insurance , they would receive their money from the government in a matter of days , according to Yahoo Finance . Details on when Google Wallet 's user agreement will be updated were not provided . How Google Wallet works : . Google Wallet , launched in 2011 , stores credit and debit card information , and lets shoppers pay for goods by tapping their phones against special terminals at store checkout counters . It works with any debit or credit card , on every mobile carrier . The service allows users to send money to anyone in the US with a Gmail address , or request money on-the-go , directly from their bank account , debit card or Wallet Balance . Users can spend received money through the service in stores or withdraw cash from ATMs with the Google Wallet Card , as well as transfer the funds directly to their bank account . It comes with 24/7 fraud monitoring , and users can disable their Wallet app or card from their Google Wallet account if they 're ever lost or stolen . Source : Google Wallet . Earlier this month , a federal judge rejected Google Inc 's request to dismiss a lawsuit accusing the technology company of invading the privacy of users of its Google Wallet electronic payment service by sharing their personal information with outside app developers . The judge said Google must face claims it breached users ' contracts , violated the federal Stored Communications Act which limits disclosure of electronic records , and violated a California consumer protection law . Judge Beth Labson Freeman in San Jose , California said Google Wallet users may try to show that Google 'frustrated ' the purpose of its own privacy policy by allowing 'blanket , universal disclosure ' of their personal information to app developers whenever they bought apps in Google 's Play Store . The lead plaintiff is Alice Svenson , an Illinois resident who said Google sent unnecessary personal information about her to YCDroid when she paid that developer $ 1.77 for an email app . She said Google raised the risk of identity theft by routinely sending information about Google Wallet users such as addresses and zip codes , phone numbers and email addresses to app developers . Svenson said the Mountain View , California-based company ceased the practice soon after the lawsuit was filed in September 2013 . Her lawsuit seeks class-action status , damages of $ 1,000 per violation , punitive damages and other remedies .
Google spokesperson confirmed current policy changed meaning funds will be protected by the Federal Deposit Insurance Corporation . As a non-banking institution , Google Wallet , along with competitors PayPal and Venmo , is not legally required to be federally insured . With the new change to its policy , funds in the Mountain View are protected if anything were to happen to the company like bankruptcy .