Google Wallet lets smartphones with NFC (near-field communication) chips transmit data to special NFC readers for a financial transaction.
The Google Prepaid Card is a virtual card that you can fund with any of your existing credit cards — no Citi MasterCard required.
After you activate the Google Prepaid Card in Google Wallet, you’ll get $ 10 in your account.
You can then top up the card with additional funds from any of your plastic cards. You’ll pay no fees to top up your Google Prepaid Card at least until the end of 2011. Since the Google Prepaid Card is purely virtual, you won’t get an actual card in the mail.
Google made a point of saying that the wallet would be open to other banks and service providers, along with other mobile carriers and handset makers. It remains to be seen how this plays out.
C/Net has created a FAQ on Google Wallet security.
How does this work exactly?
Your payment card numbers and transaction information are all encrypted and stored on a tamper-proof chip from NXP Semiconductor on the smartphone, in what Google has dubbed the “Secure Element.” Customers are required to type in a PIN to open the Google Wallet app and make a transaction.
“Think of the Secure Element as a separate computer, capable of running programs and storing data. The Secure Element is separate from your Android phone’s memory. The chip is designed to only allow trusted programs on the Secure Element itself to access the payment credentials stored therein,” Google says on its Google Wallet Web site. “The secure encryption technology of MasterCard PayPass protects your payment card credentials as they are transferred from the phone to the contactless reader.”
What if I forget my PIN?
“Today, for security reasons, this requires the user to reset the Wallet and reprovision the credit cards,” Osama Bedier, vice president of Payments at Google, said in an e-mail response to questions. “We are actively designing a more user friendly reset mechanism, and we will reveal more about this feature once it is ready.”
What if I lose my smartphone?
If you’ve locked your phone, then someone would need to know your PIN to access the phone, as well as know the PIN for Google Wallet specifically in order to access your financial data.
“The Wallet PIN protects access to the Wallet Application itself,” Bedier said. “If a user enters the PIN incorrectly too many times, the Secure Element is disabled and cannot be used for payment until it has been reset by a combination of the issuing bank, the Trusted Service Manager, and the user. Resetting the PIN requires the user to reprovision their credit cards to the Wallet, thereby forcing a would-be thief to provision all the card credentials from scratch. In addition to this, the Secure Element prevents an individual from reading any information directly from it. There are multiple security components to its design that make it difficult for any criminal to extract the data contained within its memory.”
Could criminals create fake NFC reader interfaces like they do ATM skimmers?
“There is always the possibility that a criminal might attempt to skim an NFC payment card or mobile device,” Bedier said. “However, the Google Wallet has two additional countermeasures against skimming that traditional plastic NFC payment cards do not have. The first is the phone screen needs to be powered on, i.e., illuminated, before the NFC antenna is enabled. The second is the user must enter their Wallet PIN before any credentials are released to a reader. This means the user has to clearly demonstrate the intent that they want to pay, before any payment credentials are released.”
In many Asian countries, NFC can be used for boarding trains and buses and don’t require a manual PIN number entry for that function. Perhaps that too will be incorporated into Google Wallet or competitor Mobile payment systems such as ISIS (backed by AT&T, Verizon and T-Mobile), PayPal, or Apple.
Half a billion people worldwide will use their mobile devices as travel tickets on metros, subways and buses by 2015, according to new forecasts from Juniper Research. This is over five times the number generated last year but Juniper is expecting usage to spread widely from the current concentration in Japan and several European countries. Outside Japan, systems in operation typically use SMS or bar codes.
According to Mobile Ticketing for Transport Markets report author Howard Wilcox: “Whether by expansion of SMS and bar code delivery or by NFC, at Juniper we see convenience and choice for users as key advantages of mobile ticketing. It will be 2013 before large numbers of NFC enabled devices are in peoples’ pockets and our new report forecasts the impact on transaction volumes.”
Furthermore, mobile ticketing also has potential across train and air travel, the latter driven by mobile delivered bar coded boarding passes.
Whilst SMS ticketing has been in operation for several years in large cities in Scandinavia and Central & Eastern Europe such as Stockholm and Prague, Juniper believes that recent momentum in Near Field Communications (NFC) will only add to market growth. As metro authorities begin the transition to open contactless payment systems, NFC ticket usage is forecast to grow significantly beginning in 2013.
NFC vendors in Japan are closely related to mass-transit networks, like the Mobile Suica used on the JR East rail network. Their contactless IC card technology has become the de-facto standard method for mobile payments in Japan. You can recharge your credit from your phone.
Other NFC vendors mostly in Europe use contactless payment over mobile phones to pay for on- and off-street parking in specially demarcated areas. Contactless payment using NFC runs over the same chip and PIN network as normal credit and debit card transactions, there is a payment limit on single transactions and contactless cards can only be used a certain number of times before customers are asked for their PIN number.
A report issued last month by the Federal Reserve cited industry estimates that there were 70 million contact-less devices, including credit and debit cards, and 150,000 contact-less readers installed by merchants in the U.S.
dailywireless.org
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