Google Wallet can’t catch a break. After some legitimate security concerns and a root hack, users from around the Internet are reporting a serious flaw in the structure of Google Wallet on new phones. Apparently a factory reset will completely disable Google Wallet on some (and possibly all) NFC-enabled Android devices. This isn’t even a root/mod issue – just using the built-in Android reset function will break the authentication for your device, rendering it inoperable for Google Wallet.

The issue stems from two areas: the Near Field Communication chips used in Android phones, and Google Wallet’s association with a device instead of an account. When you reset the phones in question (the Galaxy Nexus, HTC EVO 4G LTE and others) a security counter is tripped in the NFC hardware, and Google Wallet “sees” the phone as a new device. This means that your account, tied to the “old” device and NFC chip, will no longer accept a connection to Google Wallet. Standard NFC services like Android Beam are not affected.

There’s a solution, sort of. Before resetting your device, go into Google Wallet’s settings menu and reset the app. You can achieve the same results with a backup solution like Nandroid. Of course, that’s little comfort to those who have already reset their phones to deal with some technical issue, or simply to wipe it for sale. So far inquiries to Google’s customer service have been met with disheartening responses… including “buy a new phone”.

With all of these deal-breaking elements of Google Wallet’s service, it’s no wonder that it isn’t really catching on. It doesn’t help that Google Wallet’s NFC functionality only works in the United States, and that competitors are sprouting up everywhere. Hey Google: it’s time for a serious re-evaluation of Wallet, from both a technical and practical standpoint.

[via Phandroid]