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Google Wallet May End Up Inside Your Actual Wallet

Posted by timothy on from the one-neck-to-wring dept.

Several outlets are reporting, based on screenshots posted by Android Police that Google is (or "may be" — CNet calls the report "loosely sourced") about to introduce a lower-tech variant on its smartphone-based Google Wallet payment system. Instead of transferring payment information from an NFC-equipped phone, this would mean a physical payment card (like a conventional plastic credit or debit card), but one linked via Google's databanks to the user's existing bank or credit accounts. Upsides: less to carry, a simple way to suspend or cancel service on them (should the card be lost or stolen), and doesn't require you to carry your phone to make a credit or debit transaction — handy, since NFC readers are still thin on the ground. Downside: while perhaps no worse than putting the same information on your phone, it's one more step toward giving a third party all of your personal information in one place. A card that fits in a wallet probably makes a lot of sense: I live in a city with at least three pay-by-phone options in trials or fully available (CitiBank, Isis, and Google Wallet), but I can't buy ice cream or coffee with them yet. And there's no reason a card-shaped token couldn't use mag-stripes and NFC, too.

40 of 190 comments (clear)

  1. cash by Anonymous Coward · · Score: 4, Insightful

    why you can't just pay in cash your coffee?.

    1. Re:cash by Sponge+Bath · · Score: 5, Funny

      why you can't just pay in cash your coffee?.

      Using currency is so last century. Might as well tie an onion to your belt grandpa.

    2. Re:cash by TheGratefulNet · · Score: 5, Insightful

      cash gives us privacy over our transactions.

      "we can't have that, now, citizen! be a good little sheep, agree to the Shiney(tm) we give you and stop questioning what our end goals are."

      hey, if you are too dumb to realize you are being played, maybe you deserve to be played. come back in a few years and tell us how good it was for you to surrender your buying habits to google or some other behemoth.

      --

      --
      "It is now safe to switch off your computer."
    3. Re:cash by Belial6 · · Score: 2

      The same could be said for every credit card. At worst, you could say that Google is as bad as other existing credit card providers.

    4. Re:cash by kilfarsnar · · Score: 2

      cash gives us privacy over our transactions.

      "we can't have that, now, citizen! be a good little sheep, agree to the Shiney(tm) we give you and stop questioning what our end goals are."

      hey, if you are too dumb to realize you are being played, maybe you deserve to be played. come back in a few years and tell us how good it was for you to surrender your buying habits to google or some other behemoth.

      I use cash whenever possible. Most people I find don't understand the value of using cash. But I think they'll miss it when it's gone.

      --
      "What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
    5. Re:cash by stdarg · · Score: 3, Interesting

      I've used a credit card for every purchase that I can for several years now. Not only that, I signed up with Mint to explicitly track my purchases. Not only credit cards, but loans and bank accounts too.

      If you had asked me a few years ago to "come back in a few years and tell us how good it was for you to surrender your buying habits to google or some other behemoth" -- well, I would be coming back right now to let you know. So here it is.

      It's great. My purchases are automatically organized into categories for budgeting purposes. I get targeted ads that give me suggestions for saving money or making more money. For instance, Mint might say something like "Your savings account pays X%, you could make more if you switched to Y Bank." I ignore 90% of these because after switching the first time, it's not worth switching again for a tiny bit more.

      Do you have a reason for thinking that the next few years will be worse than the last few years?

  2. Merchant Fees by Anonymous Coward · · Score: 2

    As if I'm going to accept $100/m + x% transaction fees so you can buy a $1.00 icecream without cash.

    1. Re:Merchant Fees by rubycodez · · Score: 2

      I see people with a large, interest heavy balance on their credit cards doing just that.

      We're basically talking about google becoming a credit card company, with all the historical cartel & usury evil attached.

    2. Re:Merchant Fees by osu-neko · · Score: 2

      We're basically talking about google becoming a credit card company, with all the historical cartel & usury evil attached.

      Um, no, we're not. That's almost as stupid as saying printing paper money with golden color ink is "basically talking" about returning to the gold standard. Just because you carry something in your wallet doesn't make it a credit card, even if you can swipe it in all the same places.

      --
      "Convictions are more dangerous enemies of truth than lies."
  3. Around your ass... by DogDude · · Score: 4, Insightful

    This is called "going around your ass to get to your elbow". Cash works fine.

    Besides, what's with everybody wanting to continue to make payment processors of all kinds, obscenely wealthy? Doesn't anybody think, that every time they use their plastic, that you're giving Visa/MC 2-3% of your purchase? I feel like the massive expansion of cards and payment processors (paypal, amazon, google, etc.) is an Idiocracy type of thing. It's freaking me out that people are so fucking stupid.

    --
    I don't respond to AC's.
    1. Re:Around your ass... by grumling · · Score: 3, Informative

      But that 2-3% is invisible to the customer. The only time I've seen any effort to point that out is with the few-and-far between gas stations that offer a cash discount. The only problem with them is that they tend to have a higher price to begin with.

      --
      "Well, good luck finding a judge that doesn't run a bestiality site."
    2. Re:Around your ass... by deltaromeo · · Score: 2

      I agree to some extent, however, in reality, with credit cards offering cashback and other rewards, it works out costing me less to use a credit card than it would to use cash. I hate that Visa and MC are getting rich from this but by protesting and stopping use of my card while everyone else carries on, I end up subsidising their discounts. The only way I can see to get around this would be for everyone to protest together or for all merchants to implement credit card surcharges.

    3. Re:Around your ass... by andymadigan · · Score: 2

      Simple economics, using a card essentially gets the cardholder a discount. I get about 3.5% on purchases that aren't subject to any special deals or 'categories'. Using cash actually incurs fees, either find your particular bank's ATM, pay a fee, or switch to another bank. Besides that, after paying with cash you're left with heavy, noisy, coins. Sure, on the few occasions I'm forced to pay cash that change goes to the nearest tip jar, but that means I'm paying an even higher penalty for using cash. I'm not going to stand there at the counter counting out pennies to pay for my next purchase, when I could swipe a card and let the next person order.

      That's not even including the other benefits, I can pull up my credit card statements and find out how much I paid for something last year, or total up how much I'm spending on food each month. Plus, if my wallet is stolen the cash is gone, but I'm not responsible for charges on my card.

      Also, Visa/MC don't get 2-3%, their cut is much smaller than that. Most of the fees go to the issuing bank (i.e. for my Chase card, the money goes to Chase). For rewards cards, the issuing bank is returning almost all of that to me. Sure, earning a tiny amount (measured in hundredths of a percent) on each transaction does make Visa/MC very wealthy, but ATM networks make lots of money, too. So do armored car operators (for moving cash from businesses to banks, or from bigger banks to smaller banks).

      --
      The right to protest the State is more sacred than the State.
    4. Re:Around your ass... by TheGratefulNet · · Score: 3, Insightful

      Cash doesn't leave a record. Some of us like the record.

      you miss the point, I think. the point is that you get to CHOOSE, even on a per-trans basis, do you want a record or not?

      I guarantee you that you don't want 100% of your transactions recorded. are you really that open with your life? really? and you don't ever see any misuse coming from this info farm you are providing?

      --

      --
      "It is now safe to switch off your computer."
    5. Re:Around your ass... by foofish · · Score: 3, Insightful

      I don't think that there is a clause with Google Wallets (or with any credit/debit/whatever card) that you have to use that form of payment for ALL of your purchases. If he has a transaction he doesn't want recorded, he is perfectly free and able to pay for that transaction with cash.

      I like the record keeping functions of my debit card, but there are some things that I still pay for in cash. You don't have to make one or the other a way of life.

    6. Re:Around your ass... by foofish · · Score: 3, Funny

      Have you ever had refuse-smoked pigeon? Cook it low and slow, so the beer-soaked newspaper smoke can really get into the meat... nothing like it.

    7. Re:Around your ass... by PrimaryConsult · · Score: 2

      You can also tell when stores have a minimum purchase requirement for credit.
      In many states it is illegal to charge more for a credit transaction, however it is not illegal to offer a discount for using cash... it would be interesting to see stores offer a "2% discount on all cash purchases!" deal.

      Generally I pay cash at independent stores and credit at chain stores... if the price is the same, paying cash is effectively subsidizing those who would pay by credit. The credit card charge is built into the price, so those extra cents are straight up profit for the store.

    8. Re:Around your ass... by swillden · · Score: 2

      Cash works fine.

      At least in the present world, cash is sub-optimal. Not only is it less convenient, but you miss out on a lot of potential kickbacks.

      For example, I have an AMEX card that pays me 6% cash back on grocery store purchases. Given that I have four teenagers and an insane monthly grocery bill, that's real money, to the tune of about $800 per year I get back. I get 3% back on gas, which pays me another $150 annually. I get 3% back on Amazon.com purchases using my Amazon card. I get 1% back on everything else, and I route everything possible through cards... electric bill, car payment, travel expenses (that's especially nice for company travel), etc. My Discover card gives 5% back on a different category each quarter. It takes a little work to maximize the return on that one, but it's worth it (for me, anyway, my wife finds keeping track of which card to use to be too complicated).

      Yeah, all of this money comes from the merchants (except I know the grocery stores aren't paying me all of that 6%, that's more than their profit margin), which means it all ultimately comes from me in the form of higher prices. But the fact is that the prices are the same whether I pay cash or use credit and get the kickbacks. Which means that you who pay cash and I who use credit foot the bill equally -- but I get the benefit and you don't.

      I expect that this will all eventually collapse, because it clearly represents some unnecessary inefficiencies that will get squeezed out of the system. But in the meantime, I'm quite happy to take advantage of it.

      In addition, I find that using credit makes it easier to track my expenses and manage my budget, and even provides some elasticity which can be very useful at times. For example, a while ago I had some big monthly medical expenses ($5K per month) which had to be paid out of pocket and were later reimbursed by my insurance company; I could have dipped into savings to cover them, but by using credit and taking advantage of flexibility offered by the hospital (a short grace period plus my choice of when the card would get billed), I was able to arrange things so I got the reimbursement a few weeks before I actually had to pay the bill -- oh, and I got 1% cash back on that bill, too.

      Cash works. But credit works better (as long as you don't overspend and end up in debt).

      --
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    9. Re:Around your ass... by CastrTroy · · Score: 5, Interesting

      You forget that there's also a cost associated with using cash. You have to worry about employees and customers taking that money. You have to find a safe way of transporting the money to the bank. For businesses, banks will also charge you service fees for the privilege of depositing money into your account. You also have to go through the trouble of ensuring that you always have proper change for customers who use cash. Sure there are many expenses when dealing with credit cards and other non cash payment systems, but it's not as if dealing in cash is all fun and games.

      --

      Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
    10. Re:Around your ass... by tftp · · Score: 2

      Sure, knowing that you bought gas or coffee is probably not that interesting to anyone. But never buy anything interesting with a card if you can use cash.

      There is another reply just above with words "this is more likely to save me than to convict me." The point is that this system can be gamed. Not only the prosecution can access your records, but the defense can do that as well. If someone wants to steal an item from a faraway location he can do at least two things. First, he will not buy fuel with the credit card on the way there and back. Second, he will have someone to use his credit card in his home town while he is doing the crime. Only about 2% of stores ask for ID when you pay with c/c - and there are plenty that never do (nor they could do that, given the lines and the small amounts of money being paid.) These records would serve as an alibi. Not only the prosecution requested this info and found nothing, they have to give this info to the defense - and the defense can use it to assist the client. Add to that the fact that the client's phone was registering in his home town all day, and the location was consistent with the c/c purchases. Now you have the prosecution team on defense.

    11. Re:Around your ass... by SScorpio · · Score: 2

      They still make money even if you use cash. A business depositing cash pays around 1.5%-2% in fees due to handling. As a consumer the only logical thing is to only use a rewards cards where you draw some benefit from your purchases. The places you shop still take a hit for this, but that's the cost of doing business.

  4. This is what my banks card is for. by bjwest · · Score: 4, Insightful

    Why would I need another card in my wallet to duplicate what my banks check card does?

    --

    --- Keep the choice with the user..
    1. Re:This is what my banks card is for. by p0p0 · · Score: 5, Insightful

      I think the general plan is that you could unify different accounts onto this card and access them all just from the Google Wallet card. As well in the event of you losing the card, all it would take is the deactivation of this one card instead of multiple cancellations from multiple institutions.

    2. Re:This is what my banks card is for. by swillden · · Score: 5, Interesting

      Banks are better equipped. They'll just start issuing NFC cards (linked to multiple accounts) and G Wallet wil be out of business.

      Heh. It's possible, I suppose, but about 10 years ago I spent a lot of time working with banks, trying to get them to agree to allow their credit apps to coexist on a single card. It was known in the industry as the "white card" concept. The card was intended to be a customer-owned smart card which could be loaded up with many credit cards as well as other apps (probably all ID and finance-related). I think it's a great idea, myself. I did 10 years ago when the idea was to reduce my whole wallet to a single card, and I think it's an even better idea now that we're talking about eliminating the wallet entirely and just using the phone -- which I always have with me anyway. I'm hoping my phone can also become my car and house keys, my driver's license, my loyalty cards, etc. Basically there's no reason the single device couldn't manage all of my personal and identity data, and do it very securely, thanks to the embedded secure element.

      Think the banks were interested 10 years ago? No way! There was no way they were going to give up the opportunity to have a branded card in their customers' wallets. In fact, even for single-bank cards one of the advantages of smart cards that I touted to them -- the fact that smart cards are much more durable than magstripe cards -- was of negative value to them, because they like sending you a new card every two years. Why? Because their statistics show that sending you a new card gets you to use it more!

      Banks have all kinds of incentives to oppose this sort of thing.

      Of course, now that Google is making it impossible for the banks to successfully oppose card unification, on smartphones and -- if there's anything to this rumor -- on plastic cards, they might have to join it. That's what the ISIS consortium is about, but I notice that banks haven't been joining in droves. IMO, they fear the mobile network operators, who would like nothing better than to become the world's payment transaction engines, and the banks really don't want to lose that business. Worldwide credit/debit card transaction volume is measured in tens of trillions of dollars annually. Getting even a very small percentage of that sort of cash stream is worth a lot, which is why the MNOs are anxious to get in and banks are anxious to keep them out.

      (Disclaimer: I work for Google, and much of my work is related to Wallet. I have carefully avoided saying anything based on inside information acquired while working for Google. I have a lot of knowledge about this space that was acquired during previous employment, though.)

      Oh one note on terminology: It's only called "NFC" when it's embedded in a phone and combines contactless smart card technology with dumb RFID technology, and able to act as both card/RFID chip and reader. When it's in a reader-powered card it's just called "contactless smart card" technology.

      --
      Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
    3. Re:This is what my banks card is for. by swillden · · Score: 5, Interesting

      I've been working with smart card tech for almost 20 years now. I've seen the breaks and countermeasures, and am fully aware that the technology can be broken given enough effort. That's why good security designers arrange to limit the damage possible, to a value which is less than that which can be obtained by breaking it -- and we have pretty good estimates of break cost. Off-device countermeasures are critical, too, such as the risk engines already implemented by all of the credit card issuers. ID-related data should be authenticated with off-device keys, similar to the way the authentication data in passports is already secured.

      Obviously nothing is perfect, which is why the security engineers who design this stuff spread the risk. But that risk spreading doesn't mean you can't put everything in one device. In fact, it really doesn't even help to have a wallet full of separate cards, because they're all in one place. And having all of your credit cards in your phone is vastly more secure than having them all in your wallet, because your wallet has no locks and the cards in it have their whole frigging card numbers printed right on their face. It's hard to get much worse security than that (because, fundamentally, credit cards are horribly insecure -- the identifier and the authenticator are the same value? Really?)

      You can certainly feel free to avoid putting everything in your phone if you like. But the vast majority of people who are willing to trust the security designers will not be disappointed in the results. Not that there won't be occasional problems, there are problems with anything, but they will be less common than the ID and payment fraud we have today.

      Bottom line: It will be better security, not worse. I challenge you to find a serious security researcher who knows anything about the technology and disagrees.

      --
      Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
  5. It is more secure by Anonymous Coward · · Score: 2, Insightful

    With the Android phone, you have to worry about a very large attack surface area. With a Google wallet device, you do not have to worry about your latest download of Angry Birds keylogging your PIN entry field and performing a man-in-the-middle to steal all of your money.

  6. Let Google have access to my bank account? by OldKingCole · · Score: 5, Insightful

    No thanks. I'm fine with my credit card company, who haven't, on even a single occasion sent an EULA update allowing them to harvest my information for whoever knows what reason, and do not try to harvest my phone number sugar coating with "security concerns in case I lose my password".

    This company has grown too large and is WAY too much intrusive in its current form.

    For those of you with nothing to hide, please try to picture the following scenario: Google opens an HR company, specializing in delivering EXACTLY the person you like for the job. By which criteria? ENDLESS! They can practically deliver a person who has no interest in porn, spends 30% of his online time reading /. and likes the color Blue! They have all this information owing to their damned tracking cookies and gmail reading.

    Call me paranoid, but I'd like to fall into the category of "No known bank account" at Google inc. Do no evil my ass

    1. Re:Let Google have access to my bank account? by Mitreya · · Score: 2

      I'm fine with my credit card company, who haven't, on even a single occasion sent an EULA update allowing them to harvest my information for whoever knows what reason,

      I occasionally receive very thick updated "user and privacy agreement" from my credit card. It's in very small font and I usually get bogged down half way through reading it. But I am pretty sure they are talking about "occasionally" sharing info with affiliates and their affiliates' affiliates.

      do not try to harvest my phone number sugar coating with "security concerns in case I lose my password".

      My credit cards harvest my cell phone number by sugar coating it with "a way to contact you in case of suspicious activity on your account". Not to mention that they already have my home number from the application

      This company has grown too large and is WAY too much intrusive in its current form.

      True, but I think the issue is simply in aggregating all of the info. I hate the fact that google group searches now require you to login with google account to read the posts. I used to just read them for many years
      I think Google is doing the same thing as everyone else, but they simply have more clout and cover/aggregate a wider range of services.

  7. XKCD by Liquid+Len · · Score: 2

    Obligatory xkcd link
    I for one find this cartoon incredibly insightful and disturbing (and I do use google services, although I wish I wasn't).

  8. Re:Here's a radical idea: by Anonymous Coward · · Score: 3, Funny

    I agree - I pay for everything with gold!

  9. Cash is expensive to handle by sjbe · · Score: 2

    Doesn't anybody think, that every time they use their plastic, that you're giving Visa/MC 2-3% of your purchase?

    You think there is no cost involved in handling cash? Cash is expensive to count, sort, deposit, track and prone to theft. Sure you are paying the credit card processors a few percent but merchants incur pretty much the same cost due to the overhead of handling cash. Seriously, cash is a major pain in the ass for merchants and that cost gets passed on to consumers. There's nothing wrong with paying cash but there is plenty of overhead involved with it.

    1. Re:Cash is expensive to handle by DogDude · · Score: 3, Informative

      Seriously, cash is a major pain in the ass for merchants and that cost gets passed on to consumers

      You're completely wrong. As a merchant, cash is the cheapest way to get paid. Cash doesn't cost 2-3%. Nowhere close.

      --
      I don't respond to AC's.
    2. Re:Cash is expensive to handle by foofish · · Score: 3, Funny

      Cash takes extra record keeping. Cash takes somebody counting the drawer. Cash requires somebody to drive the deposit to the bank (or an armored car staff to pick it up). These may not be charges per transaction, but they're still things you'll have to pay someone to do when handling cash.

    3. Re:Cash is expensive to handle by DogDude · · Score: 3, Informative

      I understand that. I'm a brick and mortar merchant. All that doesn't come anywhere close to 2-3% of sales.

      --
      I don't respond to AC's.
    4. Re:Cash is expensive to handle by RocketRabbit · · Score: 2

      You are missing one of the greatest upsides of cash - you can keep a healthy percentage of your income totally off the books. Using cash means taking money out of Uncle Sam's wallet, which I think many can agree is a good thing.

  10. Cash is anonymous by aepervius · · Score: 4, Informative

    As long as any replacement isn't fully anonymous, I will be a luddite on principle on matter of money. The potential for abuse and tracking are too great.

    --
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  11. Re:Here's a radical idea: by foofish · · Score: 2

    Gold? Enjoy your totalitarian future! Real Luddites barter.

  12. What problem does this solve? by mbkennel · · Score: 4, Informative

    What problem does this technology and initiative solve? Whose problem does it solve?

    As far as I can tell the only problem these things "solve" is that some intermediary wants to take some of some other intermediary's free money.

    There seems to be no benefit to the person they are trying to convince to use it, unless the competition lowers interchange fees to merchants and merchants pass some of it back. And that is about as likely as new developments in simian rectal aviation.

  13. Re:the cellphone is replacing the wallet by SeaFox · · Score: 2

    it's pretty absurd a company that understands this future feels a need to move backwards

    It's really not Google's fault, though. They have to move backwards because the world is not moving forwards.

    ...but, I can't help note the reason the world cannot move forwards is because it requires cooperation from everyone. In other words, a standard for NFC payments that is open and free for all to use.

    It is only corporate greed and their desire to own the system in a way they get a cut of everything that prevents any one NFC system from becoming that standard. They all think if they make enough retailer partnerships and throw enough marketing money at their solution they will eventually "win".

  14. Do. Not. Want by water-and-sewer · · Score: 2

    I like keeping things separated, and the idea of consolidating all services, databases, and resources into my smartphone scares me. As such, I'll be adding this technology to my "Do Not Want" list.

    Right now, if I leave my phone at the beach or it drops from my pocket while getting out of the car, whoever finds it has nothing more than a couple of bucks worth of credit, and the dozen or so numbers in my address book. He won't even be interested in the hardware, which has no resale value.

    I have interest in making my cellphone so valuable because it's linked into my credit line, etc. that people will want to kill for it.

    The more I see how the 21st century is shaking out, the more I want to pay for things with cash and live in a cave in Montana with a weapons cash. And I'm only 41 - not old enough to tell you to get off my lawn yet, just old enough to see we're heading the wrong way.

    --
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