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The Problems & Reasons to be Hopeful

The Problems

What Google Wallet – and indeed all – NFC capable handsets face is a battle with perception. Smartphones are already seen as expensive items that get lost, stolen and broken all the time. So why do would it be a good idea to build our wallets into them?

For all their potential security and convenience benefits there is really only one solution: ubiquity. Only when you can walk into nine out of 10 establishments and know NFC payments are accepted will it inject enough confidence to leave the physical wallet behind. Time savings will also be minimal as people initially fiddle to get the hang of NFC apps like Wallet and queue speeds will be little faster when NFC converts are a tiny minority. Fast checkouts for NFC would work in chain stores, but wouldn't be practical for smaller outlets. A good route could be home NFC readers for desktops and built into laptops, simplifying purchasing online and getting everyone familiar with the technology.security

More specifically Google Wallet will face greater scrutiny than other rival NFC services. This is because Android is on more smartphones than any other OS and it is on the cheapest smartphones opening it up to the widest possible audience. Meanwhile Google already has to battle public privacy issues so one significant security slip-up could set consumer confidence back years. It has far greater impact coming from a handset-neutral platform than network lead services like Orange Quick Tap.

Reasons to be Hopeful

The first is the fact this technology is now pushing for a mainstream acceptance in the first place. It wouldn't be part of Android if Google and MasterCard didn't think it was ready. Likewise Guido Mangiagalli, innovation vice president at rival Visa, told us in February: "The good news is the hardware is done. We are breaking the chicken and the egg situation and by the end of the year there will be millions of {NFC enabled} phones in the market. This will drive acceptance from merchants to install the terminals." NFC can be added cheaply too, via Visa's own iPhone connector (pictured) to microSD cards and even stickers.


Furthermore the UK could play a leading role in the take up of NFC worldwide. London's underground service made the transition to NFC payments years ago through its Oyster scheme and it works well. More to the point, however, 2012 will see the Olympics come to the capital and its main sponsor will be Visa. "London is one of our main focuses," confirmed Mangiagalli. "We want to create a great showcase of this technology for the rest of the world."

So while the arrival of Google Wallet is welcome and similar systems are expected soon from Microsoft, Apple and RIM the announcements are not only timely, but necessary. For once technology has no place to discuss potential and vague timescales, it has a specific deadline to get it right and tickets to the main event are on sale now...


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.


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.


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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