Google Wallet and Smartphone Banking: Forget about Forgetting your Wallet

Have you ever reached the checkout point in a store only to realize you had left your wallet at home? Or noted with a frown the bulging square messing up the fit of that trimmed new blazer? How about just shuffling plastic cards and thinking “there must be a better way...”?

Well, there is. The days of plain old wallets have now been officially numbered as Google unveils its brand new Google Wallet service!

Um... did he just say ‘Google Wallet?’

Yep, that’s right folks. Some of you may have been enjoying smart banking (that is, banking with your smartphones) for things like checking your accounts or paying your bills, but now comes the next step—swiping at the cash register. Wallet, keys, cellphone—these items are at the top of anyone’s checklist. But not far down the road you’ll be able to scrape that first off your list!

So like, where do I put the change?

Wondering how it works? Here’s the skinny:

Not too long ago, many credit cards got a facelift that included a security chip and a small ‘Paypass’ logo. Paypass implements micro-chip technology to wirelessly communicate with the terminal at the point of purchase and to process the transaction.

Those who’ve put it to the test found it amazingly addictive—amazing, because you’d think things couldn’t have gotten much simpler than swiping your card and signing a receipt, but here we are—with Paypass, you simply tap the card on the panel and let the terminal do its magic.

Google Wallet uses the same two technologies: an NFC chip, (short for ‘Near Field Communication’) which transmits information over very short distances (under 4 centimeters), and MasterCard’s Paypass, to essentially replace your credit card.

This method is very secure because the close proximity and short duration of each transmission make it one tough nut to crack by would be attackers.

While only a limited set of cards and devices will be supported when the program rolls out this summer, Google intends to progressively expand across other platforms and eventually replace all plastic cards.

Ah, Technology...just when you think things couldn’t get any better—they do!

What about pick-pockets?

According to the Google Wallet section on Security, “a locked wallet is a safer wallet”, and “Google Wallet’s security features go beyond what’s possible with traditional wallets and cards”.

“So what’s a locked wallet” you ask?

No, you won’t have to get one of those heart-shaped mini-locks from the dollar-store.

Google protects your virtual wallet with a pin number. What’s more, the encrypted credit card credentials are stored on a special chip called the Secure Element, described by Google as “a separate computer, capable of running programs and storing data.”

They add that “The Secure Element is separate from your Android phone's memory” (which makes it tougher to compromise), and that “The chip is designed to only allow trusted programs on the Secure Element itself to access the payment credentials stored therein.”

So, while nothing in life is completely safe, this sounds much safer than using a plastic card or even plain old cash.

What about the iPhone—if Google is doing it today, Jobs must’ve done it yesterday, right?

Well, actually—no.

But he will do it tomorrow?

To be honest, it’s not completely clear. At first there were reports the iPhone 5 will have an NFC chip. Then came out contradictory reports saying that it won’t. Then more reports claiming that it will—and then a series of won’t, will, won’t, will, won’t, will... that goes on until today.

Now, consider that most of these reports are along the lines of ‘my brother’s friend—who works for a company that installed an HVAC unit for this other company that employs a guy who used to work for Apple—said...’

So it’s not exactly what you’d call ‘credible sources’.

It’s hard to believe though that a seasoned player like Apple would completely miss the boat on this one, so a safe assumption would be that Jobs has something in the works (pan intended), but simply lags behind a little bit.

There’s always a chance he might turn up at the finish line with a surprise though, it’s happened before.

So what’s in stock for us iPhone, RIM, and WIN 7 users?

Apparently, Google has expressed its willingness to partner with competitors, but there are doubts as to whether or not competitors might not prefer to develop—or are already developing—alternatives of their own.

In the meantime, perhaps not to be labelled ‘Isolationists’, Google will reportedly make a special sticker available that can be attached to the back of any compatible smartphone and let other users take advantage of the app, albeit in a limited version.

Give me the bottom line!

Smart banking keeps getting smarter, and waving your phone at the terminal is definitely the wave of the future. Striding or limping, other smartphone manufacturers are going to catch up eventually, and we’ll likely see some new and interesting variations on the concept coming up.

A virtual phone-wallet will let you:

o Leave your wallet at home.

o Store all your plastic cards and credentials in a single secure environment

o Experience increased security.

o Take advantage of rewards, coupons, and loyalty programs—right within your phone.

o Enjoy the convenience of waving to pay.

Now all we need is some kind of ‘Google Keys’ app that will start our cars and lock our condos to completely forget our short-term memory issues!

Labels: android, apple, business, google, iPhone, NFC Chip, smartphone banking, technology, telecommunications, telephone banking, use google wallet, what is google wallet