Google Wallet, Trust and Prop-ID

The concept of the digital/mobile wallet has been getting a lot of press recently thanks to Google’s announcement of the Google Wallet. Some tech analysts are calling the Wallet Google’s most important development in years. Some say the Wallet “marks the beginning of the mobile payments era,” (Sterling, 2011) although mobile payments have actually been around for a while even in North America (see our Global Overview for more details on what came before Google Wallet).

A number of web articles have already been sufficiently critical about Google Wallet, including Huffington Post’s Google Wallet: Tech Giant Doesn’t Want Your Money, Just Your Data and Washington Post’s How much do you trust Google? Anna Hervas describes the concerns well:

But will I use Google Wallet? No way. I clearly trust them with a lot of my information, but this is where I draw the line. And I’m not alone. / Sometimes [Google] innovates first and thinks of privacy later. So when it comes to giving it access to my bank account, I’m a little hesitant.” (2011)

Research has shown (Morawczynski and Miscione, 2008) that the establishment of trust is the crucial element for the widespread acceptance of a mobile payment system. The Google Wallet ecosystem is fairly circumscribed at the moment. Only one phone (the Sprint Nexus S) is compatible with the system and plenty of major retailers have yet to even consider supporting the Wallet. But, more importantly, consumers are going to be very hesitant about embracing such a technology. Technical concerns, such as what does one do when the phone’s battery dies, are important. But the crucial consideration here, and one that will affect society at large, is privacy. And this is where the Prop-ID project can contribute.

We are not interested in vilifying Google and announcing to the public that they must reject the Wallet because of the highly questionable things Google and other third-parties might do with one’s data. We do think those concerns are legitimate. However, rather than rejecting the technology, we want to help industry players like Google to understand how a win-win situation can be created here for customers and businesses by building privacy protective technology into digital wallet developments. By marketing one’s mobile payment system with an application such as the Proportionate ID Digital Wallet, a company will be showing the public that it takes privacy seriously and is not interested in being reckless with consumers’ personal information.

This perception of a hidden agenda with regard to the use of consumers’ personal information is the main hindrance facing Google right now. Informed consumers are highly skeptical about Google’s privacy policies, and rightfully so. The Google Buzz controversy and Android location tracking practices provide specific examples of why consumers should be concerned.

But we do not think that the Google Wallet necessarily has to be a privacy invasive technology. Digital wallets, at least, do not necessarily have to be privacy invasive. By openly championing privacy-enhancing technologies such as the Prop-ID Digital Wallet application, industry will stand a much better chance of getting consumers to embrace mobile payments on a substantial scale.