Anxious To Get Google's New Mobile Payment System?

If payment systems that use your phone take off, having to carry cash or credit cards around may soon be a thing of the past. Consider the risks first though.

Ed Hansberry, Contributor

May 25, 2011

3 Min Read

On Thursday, the search giant announced a mobile payment system that allows you to use your phone to pay for goods and services or use coupons you've downloaded. Convenience is the key selling factor here, but I'm not too sure I'd be quick to jump on board.

Bloomberg says the service will initially be available on the Sprint Nextel network on the Android powered Nexus S. It will use near field communication technology, or NFC.

NFC relies on radio signals over extremely short distances, typically under two inches. It allows an NFC equipped device, like a cash register, to get the necessary payment information or coupon data without having to scan the phone's screen.

So who will have cash registers that can handle this? The Wall Street Journal says initially Macy's, Subway, and American Eagle Outfitters in New York and San Francisco will be able to handle Google's payment service.

MasterCard and CitiBank are both involved, so this system should work as either a debit card or credit card, or both depending on which services you enable.

Call me old school, but I'd sit on the sidelines for a while before I jumped on this bandwagon. While I store sensitive information on my phone, it is inside a secure e-wallet application that has 256-bit encryption and is informational only. It isn't tied directly to any of my bank accounts or credit cards. Makers of financial apps for phones have proven they either don't take security seriously or don't know how. It should be noted though that CitiBank's app passed with flying colors.

You know Google is just craving to get a hold of your buying habits. Don't think for a second that your purchasing information won't make its way into Google's search system and be linked with your Google ID when it comes time to display ads when searching or reading Gmail. Remember, Google is the company that failed in privacy in a huge way when it launched its Buzz service. Boundaries sometimes just don't register with Google.

In order for this to work, you'd have to share an unprecedented amount of information with Google that would be stored on their servers. That data would have to be on your phone too, in a proprietary app that would take security researchers time to see just how secure the app was. Hopefully they would find out faster than hackers would. That data would then move over the ether via NFC through the retailer systems and ultimately to your bank. Right now, that is further than I am willing to go. I hope the system is rock solid and Google takes privacy seriously. I also hope that gas prices will fall from their ridiculous heights and world peace is just around the corner.

I'll wait until it has been out for a year or so to see what issues arise. For now, I am perfectly content lugging around a credit card. That way my bank has the financial info it needs on me and the retailer gets what it needs off of the card to get paid. I'll keep that info out of the servers of search engine companies for now.

And coupons? Well, I am still good with scissors. I told you--you might consider me old school.

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