Google Wallet Customers Receive $5 as an Apology for Account Hassles

Advertisement

Customers using the mobile payment system Google (NASDAQ:GOOG) Wallet received a $5 credit this week as an apology for recent service disruptions related to a security issue.

Wallet — Google’s entry into an on-the-go payment market that’s set to explode this year — uses near-field communication (NFC), a technology that relies on hardware in a smartphone that can authorize a transaction by wirelessly activating a chip in a point-of-sale terminal.

But it sometimes appears as if the service is still a work in progress.

Google Wallet makes payments through financial accounts that users link to the service. Citi MasterCard is one of the partners in the Wallet rollout. Users also can create a Google Prepaid Card by linking to Citigroup’s (NYSE:C) card, other credit cards, or a debit card.

Unfortunately, prepaid-account account protection originally was pegged to a PIN login. Last month, two separate sources cited security flaws that could allow a hacker to reset that PIN through a backend workaround and gain access to the Wallet account, even if the information had been deleted from the mobile device. A hacker who accessed Wallet couldn’t drain the linked financial account but could take the balance uploaded to the prepaid card.

The vulnerability of its prepaid cards led Google to temporarily halt new card issuance, and the company fixed the flaws that made the hacker workaround possible. An extra level of password protection was added to ensure security when a Wallet account is deleted then restored on the same device.

A quick, if clumsy, response

It was a swift reaction, if somewhat sloppy. The company consistently reminded customers that a mobile payment system should be treated with the same attention to security as a physical credit card, whose loss would be reported to the bank so the account could be canceled.

Wallet was one of the first mobile payment systems to hit the market, though its availability remains limited. The market is set to become more competitive this year as major companies vie for dominance in an area predicted to bring in billions of dollars in revenue within the next three years.

PayPal, a subsidiary of eBay (NASDAQ:EBAY), is preparing its own mobile wallet in conjunction with its small business payment system, Here. And AT&T (NYSE:T) and Verizon (NYSE:VZ) are teaming with major credit card and point-of-sale companies to develop the Isis system.

The $5 user credit is a nice gesture, but likely will do little to quiet Google’s continuing privacy and security controversies, some of which relate to apps offered through the Android app department of the Google Play online store. It’s only March and this year has so far seen a public outcry over privacy policy streamlining, allegations that search rankings are being compromised to promote the Google+ social networking service, and criticisms concerning a coding workaround that allowed Google to track users of Apple’s (NASDAQ:AAPL) Safari Web browser without permission.

There’s been an entire category of concerns regarding app monitoring in the Android realm. This week brought the revelation that over half of the Android apps available contained ad libraries that could create privacy and security issues for users. Google, to its credit, removed those applications once notified and has deployed a system designed to scan for flawed software in its app store.


Article printed from InvestorPlace Media, https://investorplace.com/2012/03/google-wallet-customers-receive-5-as-an-apology-for-account-hassles-goog-aapl/.

©2024 InvestorPlace Media, LLC