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Google mulls bribing operators to stuff its Wallet into pockets

ISIS and Project Oscar not sure they need Chocolate Factory...

Internet Security Threat Report 2014

Network operators may be offered a cut of Google's Wallet as the Chocolate Factory struggles to find ways to get customers to embrace pay-by-bonk.

Bloomberg has been chatting to "people with knowledge" who claim Google will offer financial incentives to Verizon and AT&T in the hope of getting them to join Sprint in offering Google Wallet to their customers. But as both networks are part of the competing ISIS platform which intends to dominate the market entirely, it is hard to see how a slice of Google pie would tempt them.

Google isn't offering a per-transaction cut – the existing payment houses have successfully fought off that threat – but there's space on Google Wallet for coupons, token, and other advertising paraphernalia. Google would like to rent out that space, and Bloomberg reckons it is prepared to offer operators a cut of that rental revenue.

But the operators have their own platform, ISIS, which has directly equivalent space they too will be offering up for rent. The UK equivalent, Project Oscar, is hoping to raise as much as half a euro per application, per installation, annually, so one has to wonder why any operator would choose to take a cut of Google's money instead.

Unless Google Wallet can become the dominant platform, the one users expect to be able to use, but so far it's been more of a trailblazer for the competition - publically showing what can go wrong, to the benefit of competitive offerings, which now know what to look out for.

A good example is the security flaw which exposed old accounts to buyers of second-hand phones. That flaw was never exploited, as far as we know, and even if it had been the loss would have been small, but Google felt obliged to shut down its provisioning server for several days while the flaw was fixed. Now the Chocolate Factory has credited every Google Wallet account with another $5 to apologise for the inconvenience, which demonstrates just how few users there are.

It's not just the users who are deserting Google Wallet; the project recently lost its product lead and one of the founding engineers, who jumped ship to launch a payment startup called Tappmo. The NFC Times attributes this move to the ongoing rift over the decision not to publish a public API through which ordinary Android developers could make use of the Wallet-stored credentials.

Network operators, and banks, on both sides of the pond are taking a more gradual approach to proximity payments. Banks may have experimented with secure elements on removable memory chips but the whole industry is now coalescing around the idea of the SIM being the natural home for secure credentials. Google wants those credentials in the phone, and Google Wallet branded, but it's going to take some serious bribes to convince the network operators that's a good idea. ®

Internet Security Threat Report 2014

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