The Lookout Blog

The Arrival of “Google Wallet”

Are plastic cards and cash a thing of the past?  This week marked a significant step for mobile payments with the launch of “Google Wallet.”  This “wallet” application will allow users to store their credit card information on their smartphone and make purchases using Near Field Communication.  Users will simply swipe their phone in front of a wireless reader to pay for goods at grocery stores, restaurants, and select shopping locations.

The initial Google Wallet release rolled out to Nexus S 4G Sprint phone users who can add their CitiMasterCard card or Google Prepaid Card to Google Wallet.  Down the road, Google plans to offer customers many payment options on multiple devices.  “Our goal is to make it possible for you to add all of your payment cards to Google Wallet, so you can say goodbye to even the biggest traditional wallets,” said Google’s Vice President of Payments, Osama Bedier.

Mobile payments will offer an easy and efficient way for mobile users to pay—but many smartphone owners want to know more about the privacy and security of these digital payments before they say “goodbye” to their physical wallet for good.  “Google wallet goes far beyond the security that you have with your traditional wallet,” said Google representative, Nate Tyler.  Currently, Google Wallet requires you to set up a Google Wallet PIN that must be entered before making a purchase. This PIN prevents unauthorized access and payments via Google Wallet (for example, if the PIN is entered incorrectly five times, the app is disabled).  Google Wallet also stores your encrypted payment card credentials on a computer chip on your phone (Secure Element) that is separate from the phone’s operating system.  This chip is designed to only allow trusted programs on the Security Element itself to access the stored payment credentials.

Google has taken many steps to secure “Google Wallet,” but as the momentum of mobile payments build—and more and more smartphone owners begin using phones to pay for goods—security will become essential.  Users can take additional steps to protect the sensitive data they store on their smartphones by following a few quick steps:

• Set a strong password. A password is the first line of defense in protecting your phone and your data.  Avoid using simplistic passwords: such as the last four digits of your phone number, or publicly available information (birthday).
• Put an auto-lock on your device and enable your screen to lock after five minutes.  Even if you step away from your phone for a few minutes–this will help ensure that your information is kept private.
• Download a mobile security software program that will keep your phone free of malware and spyware, locate your device if it ever goes missing, and remotely wipe data if the phone is ever stolen.

Smartphones have already taken on the functions of our cameras, MP3 players, and navigation systems.  As our phones become our wallet, they will be more valuable than ever.  For more information you can follow these tips for mobile payments protection!