The Saga of the Virtual Wallet

theodp writes "Fourteen years ago, Microsoft Wallet promised 'secure, convenient purchasing on the Internet.' That was then, this is now. TechCrunch reports that the first commercial for Google Wallet has been unveiled, and it stars Seinfeld's George Costanza and his overstuffed, exploding wallet. At launch (TBD), Google Wallet will allow you to use a Google Nexus S 4G (from Sprint) to tap-to-pay using Citi MasterCard cards or the Google Prepaid Card. Not to be outdone, PayPal offered a video sneak peek of its upcoming virtual wallet offering, which is promised to be more than 'just shoving a credit card on a phone.' In May, PayPal sued Google over electronic wallet technology, alleging that the search giant hired two of its former execs to obtain trade secrets for a mobile transactions project."

Comments

Employee empowerment

[bussdriver]

Why not restrict patents to only humans? Then we don't have corps screwing over their inventors and instead pay to keep them... which would encourage inventors instead of just the greedy CEO wannabees.

Why shouldn't another company be able to hire employees from the competition to gain experience? There is NO REASON for anybody to be loyal to their employer today so the corps move to take away even more of our liberties. The argument shouldn't be about restricting liberties and harming a former employee's career just to protect themselves because they mistreat them; it shouldn't even be a question. If they want to leave and help the competition that is their RIGHT, if you don't want them to screw you, STOP MOTIVATING THEM!

Its somewhat like feudalism vs democracy played out on a different board game.

Re:Employee empowerment

[Haedrian]

While I do like that idea, its has some problems.

There are thousands of patents which cover (say) Android. So this means that either google has to employ a thousand people who thought about the same idea, or employ one person who has all of them. Then if that person goes to Apple - Apple will now own Android. Smaller companies will be destroyed in this manner because now instead of paying lawyers, you can just buy employees. A small startup tries something? Buy one of the employees and crush them.

Secondly, if I'm employed to say Google, who spends tons of money for me to invent it, why shouldn't they keep it?

Re:Employee empowerment

[dmomo]

Good idea. But what if you have a group of inventors? Can a patent be shared? Can a patent be sold or transfered? If so, a corporation will always find a way to own it. Maybe the "stock holders" own it? Maybe the board of directors all share a slice? It's a good idea, but really needs to be thought out carefully.

CyberCash

[nsuccorso]

Fourteen years ago, Microsoft wholesale copied an existing competitor's product to announce Microsoft Wallet. That competitor was CyberCash, which was the first to provide a secure payment system on the Internet. I remember watching a Microsoft promotional video where actually showed pages from CyberCash's web site and presented them as their own, being careful to scroll down enough before the cameras rolled to cut off the CyberCash banners. I learned an important lesson about Microsoft that day.

Re:CyberCash

[davester666]

Yes, that sounds like the very first instance where Microsoft copied a competitors product and then presented it to the world as if it were something they 'invented'.

Re:CyberCash

[Owyn]

Someone remembers that! I worked at CyberCash. I was the primary author of the merchant server component (CashRegister, MCK, SMPS, whatever it was called) for a couple of years, before it got handed off to another team and I was assigned to the SET project (does anybody remember that piece of crap?). It was the first C++ app I ever wrote, and I was a college student, so I literally had the Stephens books on Unix and TCP/IP open on my desk as I worked 14 hours a day to complete the first version. They hired me full time after that and I eventually rewrote most of it to not suck as much. There was ONE version that leaked no memory, all the others were pretty much crap. Sorry about that to anyone who was using it at the time. :) It was all designed before SSL was implemented in browsers so it used real RSA crypto which was fun to work on (those parts were written by graybeards, I just did all the integration). All that stuff probably should have just been a web service / API but at the time nobody really knew how to build web apps and there was no other way to do end-to-end security, so it was all written from scratch. It was plain C++. STL was flaky and Boost didn't exist. I basically wrote a web server and a database and an asynch message processing daemon all rolled in one app that sat between the consumer wallet and the central cybercash gateway which unwrapped everything and talked to the "real" bank. Fun project!

Re:CyberCash

[Owyn]

Also, IIRC the microsoft wallet WAS the cybercash wallet. I didn't work on the wallet so my memory is fuzzy, but it wasn't a wholesale theft or anything, just a re-branding. We had some kind of a partnership thing going on. Cybercash was making money on the back end merchant banking side of things so having a different wallet or even a different merchant server would have been fine with us.

Re:CyberCash

[joaommp]

AFAIK Microsoft didn't copy the product and presented as their own. They were rebranding it from Cybercash, Cybercash was making money from Microsoft Wallet.

Re:CyberCash

[Greystripe]

Xerox sued because Apple made money off an idea they had thought to be worthless, however they had given permission making their suit untenable.

Trade Secrets

[slashqwerty]

What sort of trade secrets are involved in transferring currency from person A to person B? The only thing holding this back is the chicken and egg problem of deploying a standard that is widely adopted.

Re:Trade Secrets

[vlm]

What sort of trade secrets are involved in transferring currency from person A to person B?

Usually a lot of "dazzle them with BS" snake-oil crypto this is carefully designed to be completely wide open to cops and advertisers.

The only thing holding this back is the chicken and egg problem of deploying a standard that is widely adopted

Standardization probs, and that tiny little problem of a reason why. Its not the kind of thing that anyone desires. There are some wanna-be middlemen who are hoping to intermediate themselves, everyone else is like "who cares". Whats in it for me is ... um... uh... nothing, and whats in it for wanna-be intermediaries is make money fast.

Re:Trade Secrets

[tftp]

A plastic card weighs about 2 grams. It doesn't depend on power or on the wireless network; it is far more reliable than the phone; it can't be remotely hacked into. You may want the phone payment as a novelty, but in practical terms this is a solution without a problem.

It may even be that most people need as difficult a payment system as it can be - so that they start thinking about what they are paying for. Easy payments often lead to big debts. All these "wallets" simply facilitate impulse buying; the faster they do it, the less time the customer has to think about the purchase. Parting with silver coins has a certain psychological effect - here you hold them in your hand, and here you give them away. This effect is not present when you pay with plastic or those digital wallets.

LUKS, please

[bill_mcgonigle]

I'm not going to store my financials on a phone that doesn't have an encrypted data store. These guys are making great progress towards it, but Google needs to 'send beer' and take the patches.

Re:Ironic, isn't it?

[hedwards]

About as ironic as that Alanis Morrisette song

Soooooo much easier... yeah, right

[markdavis]

Yeah, because it is sooooo much more difficult to take out a card and swipe it than it is to take my phone out of its case, unlock it, find and launch the app, and then "tap" it on some reader thing.

Just what I want to do after giving Google access to my contacts, my phone calls, my applications, my location, and all my searching.... give them access to my purchasing and purchasing records.

No thanks.

And no, I don't have a Google checkout account (one reason I use Amazon App Market) and don't use Gmail (I have a Gmail account ONLY because it is mandated for Android, I don't actually use it), and don't use Google talk or chat or Picasa or Plus. For all of these, I intentionally use different services/carriers.

I am amazed that most people see no danger in turning over more and more and more and more personal information to a single, giant company. Especially one that makes all its money not on we as "customers" but from other companies. And one that doesn't even have a way to contact a human when something goes horribly wrong.

Re:Soooooo much easier... yeah, right

[Jah-Wren Ryel]

Yeah, because it is sooooo much more difficult to take out a card and swipe it than it is to take my phone out of its case, unlock it, find and launch the app, and then "tap" it on some reader thing.

I would totally go for such a thing if it worked like a disposable credit card number. Those significantly increase my privacy by preventing merchants from using a service to cross-reference my purchases based on my CC#.

Of course Google would love to use their privileged access to become the only company capable of providing such a cross-referencing service, so the idea is moot in this context. Doesn't mean someone else couldn't do it better though.

Re:Bitcoin wallet

[Anonymous Coward]

With larger chains mulling about accepting Bitcoins for payment

[citation needed]

Government

[mcelrath]

Last I checked, issuing currency to enable commerce was a responsibility of the government. The US government has been utterly failing to create electronic currency for about 30 years now, preferring to let insurance companies and usurers create a ridiculously insecure, non-interoperable systems, all the while dragging down the economy with transaction fees, so they can get campaign contributions from them.

This is the responsibility of the government. Give us electronic currency already!

Re:Government

[dkleinsc]

The US government has an electronic currency: US Dollars. Most dollars exist as simply numbers in a database somewhere in a bank, and many transactions involve only the transfer of electronic information (like account / routing numbers or credit card numbers). Whether you're talking point-of-sale or online, all transactions go through a bunch of middlemen, each of whom take a fee for their services.

All that these efforts to create a 'virtual wallet' do is change the list of middlemen involved to include whichever tech company owns the wallet. The value proposition to merchants is pretty much nil (Why spend the money to accommodate Google, Microsoft, etc if I can just ask them to use a credit card?). The value proposition is less than nil for the customer: They might be able to pay for things slightly more easily, but they're trusting their money to a business that is not regulated like a bank, and any virtual wallet that they can easily empty, a thief can also easily empty.

PayPaL already had this.

[Lumpy]

on the palm pilot in 2000. I had an app that would let me beam money to other users and store registers.

Nobody used it as paypal back then wanted obscene fees. Today they want utterly obscene fees. Thus no stores will adopt it and it's stillborn already.

I don't get it

[SoftwareArtist]

Can someone explain to me what advantage this is supposed to have over a credit card? What problem are they trying to solve?