

Google Wallet Likely Launching Tomorrow - tilt
http://techcrunch.com/2011/09/18/google-wallet-launch/

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Cherian_Abraham
A month ago, I wrote a paper on the emerging mobile payments ecosystem, which
devotes a section to Google Wallet, its strategy and the challenges it face.
You can read the whole paper here:
<http://www.box.net/shared/fsiv1bu7ugrpp814aucx>

Google's Strategy:

Google has indicated that it will not collect an interchange fee on
transactions made through Google Wallet which shows that it has its eye
squarely focused on the Payment Context. Google understands it stands to gain
very little from the current revenue and expense sharing arrangements in place
today for traditional payments. Google expects to employ a strategy similar to
where they made Android a compelling “better than free” option to handset
makers by offering to share a portion of search-based advertising revenues
generated through the Android ecosystem.

Google also plans to lease space on its wallet solution to banks for free,
compared to ISIS who will charge a rental fee. Google however has not made
clear as to whether it plans on controlling the secure element outside of
Nexus S, on handsets that run Android, despite not being in direct ownership
of the master keys.

Challenges to GW:

Google Wallet's secure element resides on the handset, which is different from
Carrier led mobile wallet initiatives(e.g. ISIS). Google Wallet is designed to
be interoperable, so as to attract more partners, but so far its olive branch
has not been met with reciprocal affection from other players in the payment
ecosystem. If ISIS Carriers (Verizon, T-Mobile & AT&T) mandate that any and
all mobile wallets must work through ISIS to function on their carrier
networks, Google may be forced to modify Google Wallet so as to work with a
SIM based secure element.

Also Google Wallet’s launch outside of U.S may run counter to European mobile
operator’s current business model where they charge fees to banks and other
service providers for putting their NFC applications on SIM cards owned by the
Telco’s. As Google attempts to court European banks to be part of the Google
Wallet initiative, this could deter European mobile operators from adopting
Android handsets if Google continues to unilaterally control the embedded
secure element. Even though Google Nexus S supports SWP (Single Wire Protocol)
that allows a mobile operator to put the secure element in the SIM, Google has
opted not to enable this capability in Nexus S.

It would be great to hear other opinions on what I outlined above, and within
my paper.

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becomevocal
Really excited about how this is all going to play out. I'm hoping for lots of
NFC support with upcoming phones, but if the stickers are really easy to get
I'd be willing to try them out as well.

~~~
kul
hey, YC company here that can help you get some stickers easily -
www.tagstand.com. We are S11, seeing decent traction right now.

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rjd
Anyone got any comments/info/insights on the tap and pay thing?

I haven't read anything on the security model but from a high level it seems
like its going to be a cluster f/k of fraud to me, loose your phone and you're
loosing direct access to your finances.

I've had a few conversations here and there but everyones opinions seem to be
the same as mine... anyone with anything to placate my fears? because this
seems like something I'm going to avoid by a huge distance.

~~~
bonzoesc
Doesn't sound any worse than regular credit card transactions, where signature
verification and ID checking are never done. It might even be better, since
you can lock your phone, and presumably wire it to wipe remotely or after some
failed guesses.

If the wallet is something you have to manually summon and isn't running in
the background all the time, it'll be safer than the contactless RFID credit
cards out there now.

If you're in the US, if your card does get stolen you'll only be responsible
for the first $50[1], just like if you were paying with plastic or online.

1: Legally; some cards protect you from the first $50 too, but none will make
you responsible for more than $50.

~~~
rjd
Yeah I wouldn't be impressed with that. My cards don't have any amount to pay
when I get compromised. Which is good as I booked a trip around Thailand and
used my personal credit card for it, and used pre pay cards when I got there.

I got back and within a few weeks I started getting transactions booked to
personal card. I delibratly didn't use that card this time (as this happens
all the time when I head to Asia) and hence why I got the pre pay cards. But
either Bangkok Airways, Air Asia, or JetStar have had there systems
compromised, as sure enough like clock work the fraudulent charges started.

Luckily you mention asia and credit card fraud and you don't even have to
supply evidence, Master Card just roll the transactions back immediatly and
cancel the card. I guess its cheaper for them to do that waste time getting
evidence for each incident.

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dboyd
I noticed Google Wallet tap and pay 'receivers' (registers?) at the Peet's
Coffee on Howard and 1st St. in San Francisco last week.

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0x12
The last thing I want google to have is a record of all my financial
transactions.

~~~
martythemaniak
Are you aware of how much data collection agencies have on you? It makes
Google look like a bunch of rank amateurs.

~~~
0x12
Those data collection agencies that work within the boundaries set by the law
have absolutely nothing on me.

~~~
magicalist
If you live in the US and don't use cash for every purchase, I think you'd be
surprised how much leeway companies have here. Many logical and
straightforward protections won't ever be put into law until _after_ some new
privacy crisis comes up. This is one reason why it was so infuriating when
google and apple were called in front of congress but AT&T and other cell
companies were nowhere to be seen...I assume Congress is OK with that data
collection (if they didn't collect location data, who could they subpoena?)
but it would have been nice to at least get some of that breathless blog and
news coverage aimed at the telecoms.

The hard part is disambiguating customers (which is why loyalty/discount cards
are so great for them), but it is really horrifying the amount of credit card
history, demographic data, grocery store purchases, _prescription_ information
(seriously) etc etc that companies can collect, cross reference, and sell
while staying within the law.

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zacharypinter
Anybody know if using Google Wallet for a transaction still produces a paper
receipt? I'd love to finally be done with those...

~~~
abraham
It will depend on how the particular store is set up. Wallet will certainly
digitally keep track of all sales.

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vicngtor
Good for the google wallet team =). I wish them all the best!!

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nextparadigms
Wouldn't this kind of thing be perfect for integrating Bitcoin payments into
it? Or does it need Google's approval? I think Bitcoin would really take off,
once we'd all have NFC phones and all the infrastructure in place.

