Google Wallet & Security – Friends or Foes?

In my today’s post I want to have a deeper look into the topic security concerning Google’s newest invention- The Google Wallet (You can find further information about this future wallet in my Blog post the week before!).

The new electronic wallet should be a boon for customer convenience. Users can leave their credit cards at home and get rid of the whole gathering of different credit cards.

But how secure will this method be? Do hackers have an easy game? Are thieves benefited? This bunch of question is buzzing through my head and I think I’m not the only one.

At first it has to be taken into consideration that only a small part of people are able to use this invention yet. Some preconditions have to be ‘fulfilled’.

  • You live in New York or San Fransisco (in these 2 cities it is launched yet),
  • Sprint is your wireless provider,
  • you have the smartphone Nexus S
  • and you are shopping at one of the rare retailers that provide the service.

So, if you think these conditions will be accomplished in the next time you have to be informed about security.

Therefore, I found a really helpful FAQ-set, created by cnet. Questions like ‘How does this work exactly?’ , ‘What if I forget my PIN?’ , ‘What if I lose my smartphone?’ or ‘Could criminals create fake NFC reader interfaces like they do ATM skimmers?’ are answered there.

Summarizing these frequently asked questions you should know that the whole data is encrypted and stored on a chip on your smartphone which Google named the ‘Secure Element’

As you can read on the Google Wallet Web site you should 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. The secure encryption technology of MasterCard PayPass protects your payment card credentials as they are transferred from the phone to the contactless reader.

After loosing your PIN you have to reset the Wallet but Google is designing a more user friendly reset mechanism right now. And if you have lost the whole smartphone someone needs to know at first the PIN to access your phone (as far as you have locked your phone) and furthermore the PIN to assess the financial information. After entering a wrong PIN too many times the ‘Secure Element’ is disabled and cannot be used any longer for payments.

Furthermore it is said that Goolge provides

much better protection for the consumer over the standard plastic credit cards broadly available in the market today.

According to Tony Bradley (PCWorld), Oliver Lavery, Director of Security Research and Development for nCircle answered the question if it is crazy to entrust Google with your financial information with no.

I don’t think it’s crazy to trust credit card data to Google Phones. While there have been high profile breaches like Sony and Epsilon recently, these were breaches in systems where security wasn’t a front-and-center concern. I think we can be reasonably confident in the security design of a system designed to manage financial transactions.

As far as I’m concerned I do agree.  When I’m using my credit card the data is being read, analysed, transferred and stored. With the Goolge Wallet it is the same. I Don’t think that there is need for additional security. But of course you should always be careful and pay attention to whom you provide your financial data. I would say that Google Wallet and Security are rather friends than foes. But to become Lovers  additional guarantee for security has to be accomblished !

At the end you should check out some helpful hints to stay save in the web:

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About Lisa

20-years-old blogging newbe, living in fantastic Berlin and studying International Business Management. View all posts by Lisa

One response to “Google Wallet & Security – Friends or Foes?

  • natiliab

    Dear Lisa,
    Your post is very informative!! I have expected that future developments will lead to cardless and cashless payments and it is interesting to know that some people in New York and San Francisco are trying the new way of paying right now. I am convinced that I will use this method in the future BUT at the moment I am glad that I am not the one who is testing it. I am convinced that the Google Wallet contains some securities flaws that will be fixed as soon as some people hack them. But I would not like to be the one whose personal credit card information are easily accessed by strangers.
    The video at the end was a good way to wrap the topic. Although the information may seem repetitive to some people I find the video charming and worth to see especially because I did not know about the 2-step- verification where an extra number makes unpermitted access to your e-mail account more difficult.

    This in an interesting blog post by a finance and banking blog that discuss the Google Wallet as well : http://www.netbanker.com/2011/06/op_ed_thoughts_on_google_wallet.html

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