There was big news in the electronic sector this week as Google significantly changed its Google Wallet service. Now, the company said, customers will be able to use any credit or debit card and, since data will be stored in the cloud, transactions can be accomplished with any of the users' devices.
The new approach — in essence, Google Wallet 2.0 — represents quite a broadening of what Google Wallet does and how it operates. The core of the issue is explained at NFC World:
Unlike version 1.0, which needed card issuers to become directly involved in provisioning their payments cards onto the wallet, Google Wallet 2.0 allows a single prepaid MasterCard to be stored on the secure element. When a user conducts a mobile payment, this prepaid card draws on a credit or debit card which the user has previously linked to the card account to fund the purchase.
The writer was using MasterCard as an example, of course. The idea is further explained by Google at its blog, which has a clever and engaging video.
There always has been an irony in the online world. On one hand, the physical world is woefully insecure. Reading a credit card number to a stranger over the phone or letting another stranger take an imprint are both fraught with problems. Physical wallets — which often are left in planes, trains, automobiles, restaurants, movie theaters and just about everywhere else — also are woefully insecure. On the other hand, the same folks who accept this as a reality of day-to-day living react with horror to perceived security vulnerabilities of online commerce.
Be that as it may, the movement of sensitive data from the device to the cloud raises security concerns. Google tried to address those worries in the blog:
Today, we’re adding a Google Wallet security feature that makes it possible for you to remotely disable your mobile wallet on a lost phone. It’s easy. If you lose your phone, just visit the ‘Devices’ section in the online wallet and select the phone with the mobile wallet you wish to disable. When you successfully disable your wallet on a device, Google Wallet will not authorize any transactions attempted with that device*. If the Google Wallet online service can establish a connection to your device, it will remotely reset your mobile wallet, clearing it of card and transaction data. There is no way you can do that with your leather wallet.
The asterisk refers to some minor exceptions to the process.
SlashGear is an object source, and it has Google’s back on this issue:
We’ve had our fair share of experience with Google Wallet since it launched several months ago, and now that it’s been updated to include all major credit and debit cards, it’s time to once again address the most important question of all: is it safe? As it turns out, Google Wallet is really, really safe. You’ve got several ways to lock down your account, and starting today, you’ve also got a remote shutdown option too.
In essence, this is more secure than a real-world wallet simply because you can’t remotely turn off a leather (or cowhide) wallet. The question thus is settled, at least on a factual basis. The real battle will be for the hearts and minds of consumers. Is it possible to convince people operating at a visceral level that Google Wallet is secure enough to trust? Will enough people buy into the premise to enable the category thrive?
This Motley Fool piece posted at AOL DailyFinance also deals with security. Writer Amanda Alix suggests that Google is ahead of ISIS, an e-wallet group headed by Verizon Wireless and AT&T. The real drama, she appears to suggest, will be the timing and precise nature of an almost certain Apple e-wallet initiative.