GOOGLE WALLET

Google Wallet   is   a  mobile  payment system developed by Google that allows its users to store credit cards, loyalty cards, and gift cards among other things, as well as redeeming sales promotions on their mobile phone. Google Wallet uses near field communication to “make secure payments fast and convenient by simply tapping the phone on any Pay Pass-enabled terminal at checkout.”

A GOOGLE  WALLET  STATION

Google Wallet launch partners include Citi as the issuing bank, Master Card as the initial payment network, and   Sprint  as the first mobile carrier. Merchants who accept Google Wallet include: American Eagle Outfitters, Bloomingdales, Foot Locker, Jamba Juice, Macy’s, RadioShack, Subway,The  Container Store , Toys “R” Us, and Walgreens.

In addition, Google Wallet works at other participating MasterCard Pay Pass merchants including, Best Buy, BP, CVS Pharmacy, Dairy Queen, McDonald’s, Office   Max, Petco , Sports Authority, Sunoco, The Home Depot, Tim  Hortons   and other retailers.

NJ Transit  also participates with Paypass and Google Wallet.

Business model

Google won’t charge users nor merchants for access to Wallet, and plans to make money by offering sponsored ads to their users. The new app Google Shopper will push two types of offers to a user’s phone:

Today’s offers, which allows the user to see a single offer redeemable for discounted goods or services in their area.

Nearby offers, which   allows   the  user  to  see  a  list   of offers in the ‘Eat’ and ‘Play’   categories   that   nearby   businesses   have   submitted through Google Places.

The Google Wallet was designed as an “open” platform. Payment networks, carriers, and banks have been invited to join and participate in the system.

Security

While a stolen debit card can be used in some circumstance without a Personal Identification number  (PIN) or signature, the Google Wallet requires a PIN and has additional security:

Google Wallet stores encrypted user information on a computer chip called the Secure Element.

The Android device itself can be locked with a  Personal Identification number(PIN).

The Google Wallet app requires an additional PIN to activate the antenna of NFC chip.

The Google Wallet device must touch or be in close proximity to a Master card Paypass  reader.

Once the transaction is completed, the antenna is turned off. Additional transactions require the PIN to be entered again.

The Secure Element only stores data and is required to open the Google Wallet app. The Secure Element memory is separate from the device memory. The chip is designed to only allow trusted programs on the Secure Element itself to access the payment credentials stored therein. The secure encryption technology of the credit card issuing institution protects your payment card credentials as they are transferred from the phone to the reader.

Security criticism

An analysis by security  company  via Forensics revealed that some card information stored by Google Wallet is still accessible outside of the application. It is suggested that hackers could create a way to intercept data by eavesdropping on Google Analytics, which monitors apps used on the Android OS. A previous analysis by the same firm revealed a number of other exploits that have since been fixed.

PayPal lawsuit

Shortly after launch, Pay Pal   filed a lawsuit against Google and two former employees of  Pay Pal– Osama Bedier and Stephanie Tilenius. The complaint alleges “misappropriation of trade secrets” and “breach of fiduciary duty.” The lawsuit reveals that Google was negotiating with PayPal for two years to power payments on mobile devices. But just as the deal was about to be signed, Google backed off and instead hired the PayPal executive negotiating the deal, Bedier. The lawsuit notes that Bedier knew all of PayPal’s future plans for mobile payments, as well as an internal detailed analysis of Google’s weaknesses in the area. Not only that, it accuses him of storing “confidential information in locations such as his non-PayPal computers, non-PayPal e-mail account, and an account on the remote computing service called ‘Drop box.’ It should be noted however that Google has run a competitor to PayPal, Google checkout, since 2006, which was replaced with Google Wallet.

Privacy

Privacy concerns include the storing of data regarding payment information, transaction details, payment attempts and other information stored by Google indefinitely. The Privacy Policy for Google Wallet indicates that much of the data is stored but may not be shared outside Google except under certain circumstances. The Privacy Policy also indicates that transaction details are not “currently” stored by Google, leaving speculation that users’ transaction details may be stored at some point. The storage of such personal information about users’ transactions is of significant financial value to a company that earns much of its revenue from data, but may be controversial to users aware of the policies.

Google Checkout

Google Checkout is an online payment processing service provided by Google aimed at simplifying the process of paying for online purchases. Users store their credit or debit card  and shipping information in their Google Account, so that they can purchase at participating stores by clicking an on-screen button. Google Checkout provides fraud protection and a unified page for tracking purchases and their status.

Google Checkout service became available in the United States on June 28, 2006, and in the UK on April 13, 2007.It was free for merchants until February 1, 2008. From then until May 5, 2009 Google charged US merchants 2.0% plus $0.20 per transaction, and UK merchants 1.4% + £0.20. Google since moved to a tiered cost structure, identical to that of   PAY PAL. Also since this date, Google has discontinued its offer whereby merchants who advertised with an Adwords account were not charged fees on monthly transactions totaling less than ten times their monthly AdWords expenditure.

Google Checkout used to have a program which allowed US IRS Certified 501(c)3 Non-Profit organizations to collect donations online without being charged the standard fee (2.9% + $0.30 per transaction under $3,000 monthly income, with lower rates for larger volumes.

Google Checkout supports customers through multiple channels like Help Center, Help Forums, and email support. Google Checkout Buyers can find help at Google Checkout buyer help centre and Merchants can find help at Google   Checkout   merchant   help centre and Google Checkout Merchant forum.). This is now only available for Google Grants recipients.

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8 thoughts on “GOOGLE WALLET

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