Last update: May 15, 2014
Everything You Need to Know About Google Wallet and NFC
You can make a purchase without opening the Google Wallet app
With all the talk about Google Wallet being hacked, I thought it might be nice to do a story about it. In case you don’t already know, Google Wallet allows you to make purchases by tapping your NFC-enabled smartphone at PayPass cash registers or terminals. NFC stands for Near Field Communication, and allows two devices to communicate when they’re moved close together. NFC builds upon earlier RFID-based systems like smart cards by allowing two-way communication. Smart cards are only capable of one-way communication. NFC also has advantages over wireless standards like Bluetooth, because it doesn’t require pairing. It also sets up faster, requires less power, and has a shorter range than Bluetooth, which reduces the chance of unwanted interception. Although NFC has been in products for more than six years, there is still a lot of misinformation about it. Let’s start by addressing some of the biggest myths:
Ten Myths about Google Wallet and NFC
- Myth: Google Wallet was hacked and is unsafe to use – Reality: While it’s true that the original Google Wallet was hacked, there was little risk to anyone who used a PIN, or pattern-based screen lock and no risk unless your phone was taken by someone with access to the hack. Besides, this issue was fixed by a software update. Even if your phone was stolen by a hacker, the same rules apply to Google Wallet which apply to traditional credit cards. In most cases you have no liability, and unlike your credit card, a hacker can only spend money which was added to your Google Wallet.
- Myth: Google Wallet only works with Citi MasterCard – Reality: Not true. Back in August, Google rolled out a cloud-based version of Google Wallet which supports all major credit and debit cards. Since that time Google Wallet usage has more than doubled. You just link one or more of your cards with Google Wallet and it remembers all of your data.
- Myth: Only a few phones support NFC today – Reality: Nine out of ten cellphone makers have phones on the market this year with an NFC chip inside them [Source: ABI Research]. Examples include the Samsung Galaxy SIII, LG Nexus 4, HTC Droid DNA, Samsung Galaxy Note II, Samsung Galaxy Nexus, Google Nexus S, LG Intuition, HTC Evo 4G LTE and Samsung Galaxy SII Skyrocket. Over 60 other devices support NFC today as well including other phones from RIM (Blackberry), HTC, LG, Nokia and Samsung. Here is the full list. ABI forecasts that 285 million smartphones and tablets with embedded NFC chips will ship in 2013, up from 102 million this year. Google Wallet is also preloaded on the NFC-enabled Nexus 7 and Nexus 10 tablets. Soon you may not need your carriers permission or an NFC-enabled phone to buy things using Google Wallet. Google’s new credit card is rumored to work anywhere that accepts traditional credit or debit cards.
You can use Google Wallet anywhere you see these images
- Myth: Google Wallet is only accepted by a few merchants – Reality: Google Wallet is currently accepted at over thirty different retail chains including 7 Eleven, American Eagle, Banana Republic, Best Buy, Bloomingdales, Champs, Chevron, Container Store, CVS Pharmacy, Duane Reade, Einstein Bros Bagels, Foot Locker, Guess, Home Depot, Jack in the Box, Jamba Juice, Macy’s, McDonald’s, Noah’s Bagles, Office Max, Old Navy, Peet’s Coffee, Pinkberry, Radio Shack, Rite Aid, Sports Authority, Sunoco (gas station), Toys R US, Whole Foods, Yellow Cab (NYC) and others. That doesn’t seem like much, but it means you can use your Google Wallet at over 300,000 MasterCard PayPass-enabled terminals. The Google Market has an app called MasterCard PayPass Locator, which helps you to locate places you can use Google Wallet, but it’s missing many places which accept it. Look for these symbols above to find merchants who accept Google Wallet. Google Wallet can also be used for in-app payments on your mobile devices although there has been some controversy over this. Experts say in five years 86 percent of all North American merchants will have NFC-enabled terminals. However, only 53 percent of merchants will support NFC worldwide by 2017.
- Myth: NFC is new and unproven – Reality: NFC phones have been around since 2006. NFC has been used by consumers in Japan, South Korea and European cities for several years without problems. London buses now accept payment from NFC-enabled phones like the Samsung Galaxy S III.
- Myth: Most carriers are still preventing Google Wallet from being installed on their devices – Reality: Google Wallet can now be installed on every mobile device in the U.S. running Android 2.3 and later. It can even be downloaded on devices without NFC support and formerly carrier blocked devices like the Verizon Galaxy S3 and Galaxy S4. That’s the good news. The bad news is, for now, Tap and pay functionality is available in the US, and requires one of the following NFC-enabled Android devices shown here with a Secure Element chip, on select carrier networks. In other words, if you’re not on Sprint or have a Nexus device, you’re still screwed.
- Myth: No signature is required when buying things using Google Wallet – Reality: Although this is generally true, a signature may be required when purchasing items costing $30 or more.
- Myth: Apple doesn’t plan to support NFC – Reality: According to Bloomberg, future generations of iPhone, iPod and iPad will support NFC. Windows Phone 8 is also rumored to support NFC.
- Myth: Google Wallet will quickly drain your battery – Reality: Although this was true earlier, the problem was fixed by a software update. Enabling NFC consumes some power, but on my phone it’s responsible for less than 2% of total battery usage.
This explains how you can purchase things without an Internet connection
- Myth: You need to have an Internet connection in order to buy something using Google Wallet. Reality: Not true. You do not need to be connected to a Wi-Fi or 3G/4G network in order to Tap and Pay using Google Wallet. That means tablet users without cellular service can use Google Wallet for purchases.
How To Secure Your Google Wallet
As mentioned earlier, the best way to protect your Google Wallet is to lock your screen. “Face Unlock,” “Pattern,” “PIN” and “Password” are all ways to do this. If you’re still worried, here are some more extreme steps to secure your Google Wallet:
There are several easy ways you can secure your phone
- Make sure “USB debugging” is not enabled – When enabled, the data on mobile devices can be accessed without first passing a lock screen challenge unless full disk encryption is also enabled.
- Enable full disk encryption – This will prevent even USB Debugging from bypassing the lock screen.
If your phone is stolen and you have Google Wallet installed, Google recommends you call 855-492-5538, and ask them to disable your prepaid card.
Not Just For Financial Transactions
NFC isn’t just good for financial transactions. Google Wallet also includes support for SingleTap, enabling users to redeem coupons and earn reward points. NFC can also be used to share contacts, photos and other files. If you’re running Android 4.0 today, you can Android Beam web pages, contacts, maps, YouTube videos and more, from one phone to another. Users of the popular Foursquare app can now bump phones and transfer places visited or lists. They can also check-in or initiate friend requests wherever NFC tags are. Imagine going to a venue and touching on a sign with an embedded NFC tag to check in. Pretty cool.
NFC isn’t just good for mobile payments, in the future NFC may even help you set up Wi-Fi connections, or enter multiplayer mobile games. There are so many things NFC is good for. I’m looking forward to using my phone to pay for mass transit. That way I won’t have to take out my wallet on a crowded train platform. You can even order business cards with an NFC chip into them, which will take the person you give them to a URL of your choosing. The main advantage to these is the fact that the URL can be changed without reprinting more business cards.
NFC isn’t limited to smartphones either. Next generation computers like the Sony Tap 20 and Duo 11, will include NFC support so you can beam data from your phone to computer, by simply touching them together. You can also purchase a Nexus 7 tablet for only $199 which has full support for NFC and Google Wallet. That’s one of the easiest ways to try Google Wallet at the moment, since carriers like Verizon are still trying to block it.
Google Wallet Isn’t the Only Game In Town
There are other mobile payment systems as well. One of the most promising is called Isis. Like Google Wallet, Isis lets you add your credit cards to your mobile wallet, but that’s not all. Isis is also supposed to let you add debit and loyalty cards to your mobile wallet, and provide access to personalized offers. That means after you use your phone to pay for a Starbucks coffee, you can tap again to get a discount or add the purchase to your Starbucks loyalty card. Isis is currently being tested in two U.S. cities, and coming soon to NFC-enabled phones from Verizon, AT&T and T-Mobile.
According to an article in Mobile Week, Isis has some distinct advantages because it’s setting up a system that can give financial institutions the reassurance that transactions conducted by smartphone will be secure. Isis has also lined up cards from Chase, Capital One, American Express and Barclays. Its transactions are supported by the Visa, MasterCard, American Express and Discover payment networks.
Isis isn’t the only new player. Retailers including Walmart, Target, Sears and others announced their own own payment system back in August called MCX. Since then they’ve gone dark however.
ISIS is conducting a mobile payment trail in two U.S. cities
Customers in Salt Lake City and Austin can now download the Isis Mobile Wallet from Google Play. Although Isis hopes to have twenty phones supported by the end of the year, only three Verizon phones are support at the moment: the HTC DROID Incredible 4G LTE by HTC, the Motorola DROID RAZR HD and the Motorola DROID RAZR MAXX HD. Before Verizon customers can use Isis they must first get a new SIM card, then add their credit, debit and loyalty cards into the Wallet. T-Mobile currently has three Isis-ready devices: the Samsung’s Galaxy S III, Samsung Galaxy S II and Samsung Galaxy S Relay 4G.
With or without Apple, the NFC mobile payments will hit $100 billion in by 2016.
Other Recent NFC-related Announcements
It appears Google will be releasing their own Google Wallet Card. You can add money to it like a debit card, and use it anyplace credit cards are accepted. Money added to this card can also be spent using the Google Wallet app running on supported NFC devices like the Nexus 7 tablet and more eligible devices. More info.
Google Wallet will soon let you make purchases on mobile sites. Soon you’ll be able to buy things from websites using your phone and Google Wallet. Google will auto-fill your name, billing address and card information into the proper fields of the website, making purchases faster and easier. More info.
Visa’s mobile payments platform V.me also recently emerged from a year long beta and is now available at 23 retailers and 53 different banks.
Chinese smartphone manufacturer GEAK recently announced an NFC ring that stores your identity, unlocks your smartphone and can share your contact info with others.
Soon you’ll be able to use your phone to unlock your door
Spring 2013 Updates
Hyundai is showing a concept car which allows users to unlock their car by tapping their phone on an NFC tag on the car door. They plan to release this publicly by 2015.
Belkin’s new HD Bluetooth music receiver uses NFC “tap-and-play” pairing.
LG Electronics is coming out with new NFC-enabled smart appliances that will let the user start a load of laundry while driving home from work, tell a robotic cleaner to vacuum the floor, or view what’s in a refrigerator from their smartphone.
Soon you will be able to unlock your door using an NFC-enabled Android phone like the Galaxy S III. The ShareKey app will also allow you to grant access to others for a specific time period. That way a repair person could enter your residence when you aren’t home.
At the end of January, Google updated Google Wallet with a new Holo-style user interface, better application stability and improved battery life.
A new app lets users users to add digital information to Near Field Communication (NFC) business cards.
Google Wallet now allows you to attach money to an email just like a photo or file.
Google Wallet launched a new promotion with popular Android apps and websites in a bid to increase its brand recognition. Gives financial incentives of $15 to $25.
Brother announces the first NFC-enabled printers, which let consumer to tap their NFC-enabled smart device to the printer and print (or scan) a document or image.
Google is bringing NFC-enabled app vending machines to Japan. More info
Google is testing NFC security tokens that could get rid of the password for good. More info.
Mobile payment service Isis plans to celebrate their (better late than never) nationwide launch with 1 million free smoothies. More info.
Using NFC, IBM brings dual-factor authentication to mobile. More info
7-Eleven, Best Buy cease NFC trials – “Near-field communication trials at some Best Buy and 7-Eleven stores are ending, as the retailers haven’t seen a payoff for the costs involved in enabling the technology, Rebecca Borison writes. “For various reasons NFC-based mobile payments options have yet to gain traction, and NFC provides no real benefit to the customer over other less costly options,” 7-Eleven spokeswoman Margaret Chabris said. Best Buy and 7-Eleven may implement the mobile-payment service to be offered by the Merchant Customer Exchange.” Source
Isis claims to have activated 20,000 accounts a day over the past month, doubling its March activity. They now have 600,000 subscribers and are supported on 68 phones. Source
Where to Learn More
Learn more about Google Wallet.
Learn more about NFC.
Learn more about Android Beam.
Learn more about Foursquare’s support for NFC.
How to get Google Wallet to work on a rooted Verizon Samsung Galaxy SIII. Step-by-step instructions. For advanced users only.
Here’s a great story about a Wired writer who went without a wallet for an entire month.
How the fragmented world of mobile wallets will sow confusion.
8 scenarios where NFC makes sense
NFC: Not just for mobile payments anymore (CNET)
NFC becoming more main stream with operators driving SIM-based NFC. As an example, Samsung teamed up with Visa to make mobile payments common place.
The first NFC payment service is being launched in China, in a joint collaboration between China Unicom and China Merchants Bank (CMB).
Copyright 2013-2014 Rick Schwartz. All rights reserved. Linking to this article is encouraged.
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