Google whips away card, leaves just clouds in your Wallet
No more pre-paid credit as Mountain View exits the banking business
Google is pulling its pre-paid credit card, citing the success of its cloudy alternative and admitting that when in comes to bonking payments no one wants to bank with the Chocolate Factory.
The pre-paid card will stop accepting top-up credit on 17 October, and after that date there will be a monthly charge of $2 in order to bleed out remaining credit (or encourage users to spend it). Users were previously only charged the $2 if they failed to use the card for three months; this will now reduce to a month to ensure the card disappears in a reasonable timeframe.
Google's pre-paid card, backed by MasterCard, is one of only two which could be embedded in the company's still-US-only electronic wallet – the other is from Citibank. But early last month the Chocolate Factory announced a cloud-based alternative which could work with any credit card, negating the need for local apps embedded in the phone, and we're asked to believe that it is the success of that scheme which has prompted Google's decision.
The new scheme works by storing credit card details, from any card, in Google's cloud. The user then makes bonking payments using their Google-Wallet-equipped phone and the balance is deducted from the credit card when a data connection is available. To maintain the speed, payments aren't authenticated online immediately, so Google takes a small risk of the credit not being there, but as payments are limited to £20 or so the risk is limited and offset by the convenience.
It wasn't supposed to be like this; NFC payments rely on credit card applications embedded in the device's secure element, so don't need to go online. An NFC payment is possible even if the device battery is dead, though for the moment Google is insisting on PIN entry every time, so power is needed.
But Google has had a really hard time convincing banks to create local apps for its secure element, which has driven its creation of the cloud-based alternative. It is unlikely that alternative has really gained many users yet, but it is an extremely interesting model which challenges many of the assumptions on which NFC businesses are being built. ®
The best payment system I've seen so far
is the one called "CASH" in Switzerland and basically it is using your card's chip, you can load it with a limited amount (max ~200 GBP) from any bank's ATM.
All it takes is to insert the card and the amount is deducted automatically. No PIN's, no authentication steps, nothing. OK, it's not secure as loss of the card = loss of the money but this is why the amount is limited and acceptance is also limited on things like kiosks, transport tickets and vending machines, toll booths and the like.
In my view, that's where the speed of the transaction really matters. For my less frequent transactions, gaining 10 extra seconds is not a concern at all.
I still think NFC payment is a solution in search of a problem - the only real benefit they're touting is that it's quicker than paying by card, but chip-and-pin is only slightly slower. Contrast:
1. Insert card.
2. Wait for reader to talk to your card.
3. Type PIN.
4. Wait for auth.
5. Collect card and receipt.
1. Touch phone to reader.
2. Wait for reader to talk to your phone.
3. Type PIN.
4. Collect card and receipt.
Total saving: 10 seconds?
The new scheme works by storing credit card details, from any card, in Google's cloud.
So how does Google Cloud work with the HSBC SecureKey?
Not even the HSBC can get it working reliably, for more than a short duration. The HSBC SecureKey is really good at helping you save - I haven't been able to access my InterNet banking for FORTY DAYS now.