Woes Come to Google Wallet

Okay, this is about the Google Wallet. First things first, when something innovative comes up, there’s this baggage of doubts and concerns associated with it. So yes, this is something about the Google Wallet controversy.

Recently, the security research firm Zvelo discovered a vulnerability in Wallet’s password system which allows smartphone thieves to access users’ secret Wallet PIN numbers. However, the threat applies only to rooted devices.

Well yeah, rooting your smartphone comes with risks, so the Wallet issue is just another one of them. Also, nobody is forcing you to root your device. Google spokesman Nate Tyler in a statement, “we strongly encourage people to not install Google Wallet on rooted devices. And to always set up a screen lock as an additional layer of security for their phone”.

That’s settled then. Let’s move to the next, more serious, issue. Mobile blog The Smartphone Champ discovered that those who owned non-rooted devices running Google Wallet were also found to be potentially at risk.

Here’s what could happen. You link a Citibank MasterCard to your Google Wallet account for payment, and if you don’t have one of those cards, Google provides a pre-paid card that acts as a credit card, to which you can transfer money from any of your existing accounts. Once you link your prepaid account to that phone, the linking data stays inside the phone, even after wiping a phone of all your personal information.

So the person getting hold of your phone after you gets all that info.  And they can reinstall Wallet and access your prepaid account with his or her own PIN. The interloper can’t siphon out your credit card account, but he or she can still grab all the credits you have put into Wallet.

Google was quick to respond to the situation. People are asking if Google Wallet is safe enough for mobile phone payments, Google Wallet and Payments vice president Osama Bedier wrote in a blog post Friday evening. The simple answer to this question is yes.

Also Google spokesman Nate Tyler said the company is currently working on an automated fix for the exploit, and it should be ready soon, says. Moreover, Google urges anyone who loses a Wallet-carrying smartphone to disable his or her account ASAP.

But it should be said that the mobile payment solution from Google is new and developing. And there’s only one phone on which Wallet will work: Samsung’s Nexus S 4G, carried by Sprint. So the issue is not widespread for one thing.

Also, Google still has to get over some issues with the carriers, who do not earn a penny more by supporting Google Wallet. Google has to convince the retailers as well.

Few retailers are prepared to support NFC payments, as it requires deployment of additional infrastructure at the checkout,” Gartner analyst Van Baker said. Even when all these ducks line up, there is little to convince the consumer to use the technology as they are pretty comfortable with their cards.

Issues are many, but it seems Google is prepared for the fight/revolution. Mobile payments are going to become more common in the coming years, Bedier wrote. In the meantime, you can be confident that the digital wallet you carry provides defenses that plastic and leather simply don’t.

Google is looking at long term pay-offs with optimism, like always.