Google Wallet launches – pay for a purchase with your phone

Google made the long anticipated announcement about the new way to pay for your purchase with Google Wallet.  Instead of waving your credit card like you can automatically do with paypass, you’ll be able to wave your phone without ever opening your wallet.

The first phase of this program will only work with an Android Nexus S 4G phone and a Citi MasterCard, Google Prepaid Card, or gift card from a participating merchant.

You can enter the first six letters of your Citi card to see if you’re eligible for the program. You can also enter your zip code on Google’s website to see where Google Wallet will be accepted.

Since I first wrote about this when it was first announced, and now that it’s launching the businesses accepting Google Wallet have changed. Some of the following brands in the Cleveland area appear to be participating depending on your zip code: Sunoco, Rite Aid, Foot Locker, Foot Action, CVS, BP, Champ Sports, American Greetings, and Abbotts.  There may be more depending on where you live. Search by zip code to see a participating retailer near your home.

Globally, Google Wallet will be available at more than 311,000 global PayPass merchants.

There will also be a loyalty, rewards, and coupon component to this app.  Some of the deals will mirror popular daily deal sites.

Google produced a clever ad to promote the service. It’s worth the :30 for a good laugh with one of the Seinfeld stars and his stuffed wallet.

Security and mobile payments
This is expected to be one of many new payment methods to hit the market. Verizon teamed up with Payfone to offer a similar service, and there are other options available. As our smartphones get smarter, security is a big concern. We use them for boarding passes at the airport, to check our email, pay bills, and now buy gas or another purchase at a store.

Google Wallet will use secure payments and touts that it will go beyond traditional cards. The first release will require an app-specific PIN. Your personal card information will be encrypted and stored on a chip that’s separate from your phone’s memory. That data will only be accessible by an authorized program.

Citi Card says consumers will have $0 liability on unauthorized purchases. The card company adds that only the last four digits of your account number will appear on the screen.  Even though a PIN will be used to access payments, if you lose your phone Citi says just contact them like you would if you lost a credit card.

Consumers Union, the publisher of Consumer Reports, found consumers need to ask questions about security because the protections vary widely.  CU sent letters to 18 wireless carriers in May urging them to strengthen their contracts so mobile payment users get the same protections as a credit or debit card.

“As more Americans start using mobile phones to make purchases, we need to make sure that consumer protections keep pace with all the new technological advances,” said Michelle Jun, senior attorney for Consumers Union’s Defend Your Dollars campaign ( “Consumers shouldn’t have to worry that a lost or stolen mobile phone or billing error could turn into a costly financial headache.”

Credit cards provide you the most protection, and CU says you’ll get the same federal protections for a debit or credit card if that account is linked to your mobile payment system. However, some of these systems will work with prepaid or gift cards and you won’t get the same protection in case of an error.

While that federal protection is supposed to be there, it may be tricky getting your money back. In its review of 18 wireless contracts, CU says none of them provided protection as strong as the federal protection for credit or debit cards.

CU also says 16 of the 18 wireless contracts require consumers pay for the charge while the dispute is investigated.

Tools to safeguard your information
If you choose to use these for convenience sake, make sure you set a PIN or security symbol to even access the basic features of your phone.  A second PIN to access private functions of your phone is a second layer of defense.

It’s also a good idea to download a program that sounds an alarm when you lose your phone. It may help you track down your phone, and will deter a would be thief from wreaking havoc on your life. The more layers of security and protection you take, the better off you’ll be if your information lands in the wrong hands.

Don’t forget anti-virus software. It won’t protect your money, but it will prevent fraud and prevent a hacker from accessing your personal information.

Bottom line — this is an emerging technology and the protections and security have to catch up. Read the fine print before you sign up. Talk with the mobile payment provider and your cell phone carrier to make sure you’re covered in case of fraud or simply a mistake.

Related links you may  like:
Anti-virus firms push security software for mobile devices (USA Today)
Online shopping made easier with virtual wallet
Reduce your digital footprint
Verizon mobile payment system