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Google Wallet Struggles With Being Open, But On Only One Platform: Its Own

June 1st, 2011

Mulpuru said going partway open is generally going to frustrate both customers and partners. “It sounds like they see ‘open’ in the same way that APIs are open: in a select way. Anyone can develop something for it, so long as it’s within the parameters of what has been outlined. It’s all about not having skin in the game and trying to avoid investing in development support—usually the result is little upside or uptake for anyone.”

The Forrester argument is quite legitimate, which is a shame, because what Google unveiled seemed to have most of the elements of a first-class payment system. Despite some payment security hiccups during the demonstration, the Google presentation included what appeared to be a very well-thought-out, seamless user interface. The security is primarily dealt with on the chip, but Google also included the ability to shut off the app. It’s possible to activate and deactivate any of the individual cards in the virtual wallet, too. That’s a nice touch for addressing the security concerns of cyberthieves who are trying to catch card data in the air. The card is only activated right before the purchase and can be deactivated seconds after the purchase is completed.

But let’s get back to Forrester’s point about NFC challenges in Japan, which is arguably the most mobile-phone-friendly country on the planet. To paraphrase that old standard, New York, New York, if NFC can’t make it there, can it make it anywhere?

With today’s retailers, there is a huge investment in NFC integration that has to happen before we even know whether NFC support will translate into NFC transactions. Even if the vast majority of those investments are heavily subsidized by Visa and others in the chain—including Google and Apple—it’s not just the investment dollars that are an issue. It’s also an issue of time.

The move to retail NFC “is not a 12 to 18 month investment,” said Peter Osberg, senior VP for Marketing at Denver-based retail payments vendor IPCommerce, who added that it could take significantly longer.

Anything that will take more than two years in mobile might as well take 20 years, given how quickly M-Commerce is changing. Then there’s the issue of getting NFC phones into the hands of enough consumers, many of whom will have to upgrade.


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Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

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