Sunday, May 29, 2011

Google goes NFC payments, oh la la!

When I was at the IIW12 a presentation was given about the changing landscape in payments and banking.
PayPal was giving the creditcard companies like VISA and MasterCard a hard time keeping customers for their online payments via creditcard.
Why use expensive creditcards when you have PayPal?
But the creditcard companies try hard to keep their 'beloved'customers.
How? Well, they add NFC-payments to the creditcard-landscape.
Users can pay for goods using NFC-enabled devices, either NFC-enabled phones with stored data that act as a debit/credit payment card (example follows soon) or NFC-powered contactless payment cards they touch ('wave') to readers like VISA's payWave.
However, American Express did not want to wait for the NFC-enabled devices and, in March 2011, launched "Serve" an app that turns a desktop, mobile phone, and Facebook account into a virtual wallet. With Serve, customers can send and receive money, pay bills, or make digital purchases through a cloud-based peer-to-peer network.

Hm, lots of new online payment-products, and lots to say about security and privacy, but when I was making this blog Google came with an anouncement.

All this NFC- and mobile payment in the cloud also triggered Google to get involved.
So, 26 May 2011 they launched Google Wallet (duh!!), together with Citi, MasterCard, First Data, and Sprint as their partners.
Hm, MasterCard already had PayPass ,but why not partner with Google to use it's NFC-enabled Nexus 4G?
Nothing new concerning NFC-telephones, if you look at VISA's efforts, and the ISIS-project, but now Google is involved. OK, Google has its Google Checkout, but is now also into NFC-payments. This was for Sprint the call to join Google wallet and not ISIS.
Also important, because the NFC-payments adoption is in Europe higher than in USA: Dutch public transport already uses a NFC-enabled card, comparable to the U.S. ORCA-card, which I also saw in San Fran.
Heee, but was the Dutch OV-chipcard not already hacked way back in 2008?
That's why I was triggered when I saw the creditcard companies using this technology!!
Even, if Google and financial institutions are involved in the NFC-payments network, I'm still cautious, because of my experience with the OV Chipcard.

Why I am cautious I will discuss in my next post(s), where I will look at the security-issues related to using NFC-enabled devices for payment,by card or by mobile phone.


Anonymous said...

Great post, Cordny!

I'm very sceptical about the viability of NFC phones as a method to gather intelligence about users buying habits. Why?

Because I don't think they will have enough market share to make them a reliable source of data.

Also, we're moving to on-line, so why try to get data from a market sample that is likely to be so small that it cannot represent a trend?

Also, I share your fears about security. phone tech from China is a prime target for hacking, isn't it - assuming it hasn't been hacked already!

Cordny Nederkoorn said...

You're right Neil,

and that's also 1 of the things Google wants naturally, to gain intelligence about users buying habits and sell it.
But it's the reliabity of the marketshare, which as you say also depends on its amount.
Well, they want to be the first, as always to try, let's see how far it goes, but we stay alert on its security.