How do you know if something is going to be the next big thing? Simple, just look at how many lawsuits are lining up against it. Take the launch of near field communication-based payment platform Google Wallet last Thursday. No sooner was the story in the wild than PayPal and its parent company, eBay, went on the warpath claiming the search giant has contravened it’s ‘don’t be evil’ mantra by obtaining information on PayPal’s point-of-sale strategies.
According to PayPal two former employees, Osama Bedier and Stephanie Tilenius, disclosed company-sensitive information to Google in the development of Google Wallet. A further two employees were allegedly poached to complete the project. The matter is complicated further with the reveal that Bedier was part of the team that negotiated with Google for using PayPal as a payments platform in the Android Marketplace – discussions that have thus far failed to reach agreement. PayPal has maintained that going to court isn’t its style; let’s see how far its willing to go before it gets left to a judge to sort out. Don’t be surprised to see those Marketplace negotiations wrapped up ‘to the satisfaction of all parties’.
Is Google Wallet worth going to war over? Yes. If near field communication (NFC) takes off, and it will, you are going to have the way you pay for goods and services changed forever. Effectively, Google Wallet turns your smartphone into a swipe card with direct access to your credit card.
Connected
The technology, somewhere between Bluetooth and a barcode scanner, is based on the transfer of information over a radio frequency made when an active ‘initiator’ device passes over a ‘passive’ receptor. Unlike Bluetooth, where a connection is made between multiple devices, near field communication pairs only two devices over a short range (less than 20cm) and doesn’t require the receptor to have a power source. While hardly suitable for transfer of large files (Bluetooth manages about 2Mb/s transfer, NFC about a quarter of that), NFC is ideal for swipe cards, tags, barcodes and sharing contact information. Its rapid set-up time makes for almost instantaneous creation of links – something Bluetooth can’t manage. Lastly, NFC is remarkably energy efficient, so you can have it running in the background, make multiple transactions, scan multiple tags, swipe as many initiator points as you like and it won’t drain your battery.
Google launched Wallet last Thursday, treating it as a combination app and chip system with some impressive security features. Your credit card information will be stored on a chip in encrypted form separate from the main storage. Any attempt to tamper with the chips causes it to self-destruct, and Google claims, it is resistant to laser attack as well. The app has to be open for Wallet to work and it is PIN protected.
For the moment NFC is part of the Google Nexus S smartphone; rumours are the iPhone 4S will have it (we’ll know for sure in a few weeks); Samsung is on board with the Galaxy S II (out in June) and Wave 578; and HTC has something we might see after it unveils its tablet line. Not every territory will be getting NFC phones at the same time. Australian users will have to display a little patience, largely due to the absence of compatible services.
The applications for near field communication are startling and go far beyond point-to-point sales. But, like the damp squib of augmented reality, it’s easy to use, and hence more likely to gain mass acceptance.
No wonder PayPal and eBay are miffed. As thunder stealing goes, this one is a real cracker.
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