Google Wallet phone-pay is coming - but how will it work?

How will it work?

That is the important question that I've never seen real detail on. Potentially:

* Generate a public / private key pair on your phone

* Your phone registers your public key with Google

* You log into a web-site and hook it up to your credit card, bank, etc

* The private key is stored in a secure section on your SIM card that Market apps can't access

* The POS system sends a request to your phone containing the entire receipt, a list of all the items, their values, tax, and all merchant info including their public key

* Your phone displays the receipt to you

* You confirm by swiping your thumb across the Atrix thumb scanner

* Your phone signs the transaction and responds

* The merchant validates your public key against Google's DB to see if you have sufficiant funds, so they know you can pay

* Your phone uploads your transactions into quickbooks each night over WIFI

* You have total security and an effortless record for accounting and taxes

My bet on how it will actually look:

* You type your credit card number into your phone

* It gets stored in the file system unencrypted and accessible by any downloaded malware

* It will act just like an existing RFID credit card - i.e. it sends the number to any scanner within range, no encryption, no authentication, no verification.

* Merchants use the new system to transfer liability to you

GoogleWallet, PreyPal. What's the difference?

One has to wonder what the retail banks been doing for the past 10 years? Sleeping? I have been paying my regular bills via internet banking for I can’t remember how many years now and I have not written, even for an irregular payment, a paper check for at least three years. I’ve banked one paper check in that same time period.

Likewise, where have the participating retail banks’ payments aggregators, Visa/Mastercard, been for the past 10 years? Asleep too? While it has been riding on their backs, they have allowed this parasitic, clunky, PayPal to develop a market for a simpler online payments product that the retail banks and/or Visa/Mastercard could always have been better able to provide in a much more effective, efficient and professional manner.

Please, Banks/Visa/Mastercard, get off your butts and exorcise this PayPal leach that is riding on the back of, and siphoning revenue off, your own payments processing system.

The retail banks have email addresses for all their internet banking customers. How hard then could it be for their payments aggregating partners, Visa/Mastercard, to optionally utilize for online transactions the unique email addresses of payers in place of the relatively unsecure online, twentieth century POS card numbers, for both direct debit and credit purchases? I ask you?

The principal point of the PayPal matter is that the PreyPal operation is no more than a parasite on the retail banks’ existing payments processing system; except for PayPal-to-PayPal “account” transactions, PayPal cannot operate without utilizing the retail banks’ payments processing system. Unlike the credit/debit card aggregators, Visa/Mastercard, PayPal has no formal partnership with all the participating retail banks; PayPal performs all its “direct debiting/crediting” banking transactions via its retail banker, GE Money Bank (ugh!), and all its credit card debiting transactions PayPal does simply as a “credit card merchant”, albeit probably the biggest credit card merchant on the planet. In effect PreyPal buys all the necessary services from GE Money Bank at a “wholesale” price and then charges their individual PayPal users a “retail” price.

Ask yourself, why then should the retail banks, forego this revenue to such a parasitic operator who does no more that aggregate payments, as Visa/Mastercard already do on behalf of all their participating partner retail banks. As has been said many times before, Visa/Mastercard could do for the retail banks the same job for universal online transactions as they already do for “card” transactions—and do it more effectively, efficiently and professionally than the clunky PreyPal. All they have to do is implement the email address identifier. Why should we otherwise deal with PreyPal, a non-prudentially regulated operator who is incapable of professionally managing the risk involved and has effectively no transaction mediation process. …

Be gone! PreyPal; and take John Donahoe with you.

All anyone needs to know about the clunky PayPal:

http://forums.auctionbytes.com/vbulletin/showthread.php?p=165263

Enron / eBay / PayPal / Donahoe: Dead Men Walking.

So...

....…..the world’s biggest advertising firm will be “facilitating” my discretionary spending.

I don’t see what can go wrong with that.