September 19, 2011
Why I'm Skeptical of Google Wallet (and all RFID Communication) For Now
Computerworld is reporting that Google Wallet is now live. Google Wallet, if you are not aware, is Google's Near-Field communication tool for payments. Essentially turning your phone into a credit card. While it's a great idea in concept, there are some security risks when dealing with NFC (Near Field Communication) technologies: the signal can be intercepted and utilized for what it was not intended. Google has addressed this issue by requiring a PIN to be entered in in order to authorize payment, which is a real concern and a leap forward for NFC payments, but there is another concern I have with the technology: Is it really needed?As with any invention, you need to fill a need. Right now there are two types of payments: hand out cash to the teller, or use a card to swipe and enter in a pin number (or signature). Both take moments, rarely longer than a minute. With Google Wallet, you touch your NFC enabled phone (currently only the Nexus S 4G supports NFC), enter in a PIN (a security measure), and make your payment. Again, it would take moments, and rarely longer than a minute. So where is the benefit? Some might say it reduces your need to have a wallet to begin with, but I don't buy that. You still need your ID with you, and other cards should Google Wallet not be accepted. So you still have a wallet, and you are taking about the same amount of time to take out your phone from your pocket vs. taking out your wallet from your pocket. So I'm not seeing a time-based benefit here. Another benefit might be that you have full control over the payment in that you enter your PIN number on your phone, as opposed to an easily viewable panel by the teller. That could be, and if so that would increase your security for your payments. So there is a benefit. But what about battery life? For anyone who has ever had their battery die on them while talking, texting, or playing a game, it's frustrating. And if that is the only source you have for payment, you are kind of in a spot. Granted, if you are a true prepper, you would probably have a solar panel ready for your phone (and who wouldn't?), but it still takes time to charge. So, ultimately, I don't see a benefit for Google Wallet in the short term. That, of course, may change if governments of the world agree to a single method of identification that is computer-based, and any device could access it using some special method of authentication. At that point your ID would be on your phone along with your credit card. Companies that offer cards to provide membership (such as Costco) could follow along, and eventually you would only need a mobile device for all your connections. It's just not there yet. So am I saying Google Wallet is a bad idea? Not in the least! I think, in principle, it's a great idea, Google just has a lot of hurdles that need to be overcome before Google Wallet can be a success. So for now, don't expect people to flock to Google Wallet as a method of payment, and expect slow growth and adoption. Like other digital technologies, it will have a large amount of inertia to overcome before it will become a power in the marketplace. Hopefully that will give everyone a chance to work through all the security issues and concerns that will come up. And no, I'm not planning on adopting it anytime soon.