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Google Banks On Wallet

Gordon Kelly

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Like it or not, your future phones are going to gain the functionality of a credit card. It is driven by banks which want to encourage impulse purchases and lapped up by mobile phone makers who want a cut of the revenue. Even if you don't use it thieves won't know this and more will be stolen regardless. So if you can't avoid the side effects, will the positives be worth it? They should be... in time.

Google Wallet is the latest company attempting to convince you of this. It announced Google Wallet this week, a contact based payment system for Android using Near Field Communication (NFC). NFC will be common to all handsets - regardless of manufacturer - as they make the transition to virtual credit cards. Google said Wallet trials will initially be limited to New York and San Francisco, a single handset (predictably the Nexus S) and one network (Sprint). It hardly sounds earth shattering, but look closer and you'll see why it should be.

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Wallet will be the defacto NFC service across all Android devices. NFC enabled devices are already on the market, including the Samsung Galaxy S II, LG Optimus 2x and Motorola Atrix. NFC also has the backing of HTC, ZTE, RIM, Apple and (in particular) Nokia. It is backed by both Visa and MasterCard (the latter is behind Wallet) and every major bank.

As part of Wallet’s trial it has the immediate backing of some of the largest US chains, including Bloomingdale's, Foot Locker, Macy's, RadioShack, Subway, Toys R Us and Walgreens. Google is also working with VeriFone, Hypercom, Ingenico, VIVOTech and others to develop next generation point of sale systems for retailers, major and minor. It was noticeable that in Google’s official press release all quotes came from these enthused partners. There was no quote from Google itself, there was no need to.

The Pitch

The theory behind NFC is simple: checking out is a pain. It takes time to find the right money, dig out the right credit card, process the transaction, work the cash register or count the change and we often lose the paper receipt.

Wallet speeds up the whole process by keeping all your cards in one place (including store cards), offers touch payment (PIN free up to user specified levels) and provides a digital receipt. The phone never needs to leave your side (unlike credit cards in a restaurant), you key your PIN into your own device, not that of a third party and stolen phones are spotted more quickly than stolen credit cards and can also be shutdown and erased remotely.

If that isn’t enough Wallet will be paired with 'Google Promotions' which ties in store discounts for using the service with the geo-location of your phone. Depending on the implementation it could be brilliant. It could also be incredibly annoying.

BOFH UK

May 30, 2011, 1:37 pm

I've been thinking about this since the Nexus S was announced and I still can't figure out why I'd want it. Oh I want NFC, absolutely, but I want it on my credit / debit card, not my phone. In short I want my credit card to work the same way Oyster Cards do now, tap to make small payments with chip and pin for larger ones. Having your wallet on your phone just seems ridiculous and a case of technology attempting to come up with a problem that it's solved rather than the other way around. Leaving aside any other concerns what happens when your phone battery dies? Suddenly you can't pay for anything, use a travel card or even call for help, huge step forward there.

Gordon394

May 31, 2011, 7:49 pm

BOFH UK to be fair I think the article addresses these issues. NFC doesn't require a battery to work. There is no battery in your credit card. An NFC equipped phone would use your default card when the battery is flat.

As for why we'd want it, I think it is desirable. I'd certainly far rather enter my PIN into my own phone for larger purchases than again have it taken away for chip and PIN. Likewise the integration of all my credit cards and store cards into a single device would be convenient, as would digital rather than paper receipts.

PGrGr

June 1, 2011, 1:06 pm

If it's as good as it sounds, then it will be brilliant. However, I can't silence this small alarm bell ringing with relation to security.

I remember thinking that Chip and Pin sounded brilliant when they announced that a few years ago. I understand that this tech has reduced fraud, but criminals have started finding ways around it now. I can't help but feel that however many levels of security Google and their partners have devised, it will only be a matter of time before criminals start finding a new way to hack the system.

The problem with electronic transactions (of all types) is that the system creates an infinite incentive for would be thieves. Once you have worked out how to skim some money off one person, be that a buyer or a seller, then you have worked how to skim money off them all.

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