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However, the mobile payment application is still more secure than many of its rivals, security firm viaForensics says.
December 12 -
Four reasons Verizon's smackdown of Google Wallet is bad for banks and consumers.
December 7 -
Google has technology plans designed to help reel more banks, merchants and coupon providers into its mobile payment scheme. It continues to take a hardware agnostic approach to the mobile wallet.
November 23 -
PayPal has delivered on its promise to activate contactless payments for its mobile wallet. The latest update to its app for Android handsets adds support for near-filed communication.
November 8 -
Google Inc. isn't asking for a share of the payments revenue generated with its new mobile wallet. Nevertheless, partnering with the search engine juggernaut could be a trade-off for banks.
June 5
Though the mobile payments space is still nascent, the early successes seem to be those developed by technology companies and mobile-phone carriers — not banks. A new product from Sequent Software Inc. might level the playing field.
Sequent's product will allow banks to more easily develop their own electronic wallet applications that use near-field communication chips to enable contactless payments at the point of sale. This potentially frees banks from the limitations imposed by other mobile wallet systems.
"If [Sequent] is successful in getting this solution out there, it could be pre-installed by phone manufacturers and standardize how developers incorporate payment into their applications," says Rick Oglesby, senior analyst with Aite Group.
Google Inc.'s offering, Google Wallet, was pitched in May as a bank-friendly mobile payment system, since Google makes its money on ad sales rather than transaction revenue. However, Google's technology
The issue Sequent aims to resolve is how to best provide access to the so-called secure element of the NFC chip, which stores the important identifying credentials used to conduct consumer transactions. Sequent, of San Francisco, has created middleware that lets developers access the secure element without having to take on the role of the Trusted Security Manager, or TSM. The TSM is a third party that manages the security of such credentials.
"We let those who manage security send the data to the secure chips we manage," says Drew Weinstein, founder and chief executive of Sequent.
Consumer-facing companies have jockeyed to get a leg up in the battle for the electronic wallet. The frontrunner so far is Google, of Mountain View, Calif. Google's system stores the secure element on the phone's chip, but only for phones that run its Android operating system. Citi is Google's financial partner in the endeavor, using the bank's MasterCard products as the funding mechanism for the wallet. First Data Corp., a unit of the Kohlberg Kravis Roberts & Co. private-equity firm, is the TSM.
Google isn't threatened by Sequent's technology, a spokesman says. "We believe the variety of players in this market speaks to the promise of mobile wallets," he says.
PayPal Inc., a San Jose, Calif., unit of eBay Inc., has also been quite active. It announced plans for
Similarly, a consortium of telecommunications providers which includes AT&T Inc., T-Mobile USA Inc. and Verizon Wireless has created the mobile payment venture Isis, which will let them control the wallet experience through their wireless networks.
Sequent aims to disrupt this culture of control by offering technology that lets multiple wallet applications interact with the secure element of the chip simultaneously. And Sequent's wallet is not limited to payment — it also supports cards used for health care, transit or loyalty programs.
That means Google could work with Sequent just as easily as PayPal could, or any bank that wants to develop its own wallet application, experts say.
"Consumers using an NFC phone can get their credit card data not just in a wallet, but in the mobile banking application that [banks] own and control," Weinstein says.
The Sequent product is an early display of where the NFC market is moving, says Zil Bareisis, a senior analyst for the research firm Celent.
"The interface gives multiple providers the ability to access the same data credentials," Bareisis says.
Ultimately, platforms like Sequent's could speed up the development process for the mobile wallet, says Andy Schmidt, director for commercial banking and payments at TowerGroup.
"There is the potential to foster innovation using these tools, which might get [products] to the market faster," Schmidt says.
Sequent says it is currently working with fewer than a dozen of the largest North American banks developing applications using its technology.
