No more prepaid cards - for now
Smartphone payment system Google Wallet, rumoured to be launching in the UK in time for the London 2012 Olympics, has been hit by a security issue.
Internet giant Google has temporarily disabled the option to set up new prepaid payment cards, after discovering that if the screen of a smartphone is left unlocked, someone other than its owner can potentially use the Wallet application to gain access to any remaining funds on such cards.
Google Wallet stores information from a person's credit cards and a prepaid Google payment card. When buying products or services, if the retailer in question has permitted Google Wallet transactions, payment can be made using the phone.
Though the risk is limited to unlocked smartphones and prepaid Google cards - and does not threaten the user's credit cards or wider financial information - Google has withdrawn the vulnerable part of the facility to make it clear that it takes security seriously.
Tackling security fears
"People are asking if Google Wallet is safe enough for mobile phone payments," stated Google's official commerce blog. "The simple answer to this question is yes. In fact, Google Wallet offers advantages over the plastic cards and folded wallets in use today."
However, prominent analyst Michael Gartenberg, of technology research company Gartner, has suggested that Google may be rethinking its strategy with regard to payments.
He said: "Google often jumps head-first into new projects, paddles around, and then decides whether it's worth staying in. I don't think Google would pull the plug on Google Wallet entirely, but they may be slowing down and regrouping."
Google's commerce blog has stated that a permanent fix will be found soon.
Daniel Nolan, managing director at theEword, said: "When it comes to financial matters, security is paramount - and research has shown that people are already hesitant when it comes to banking via mobile phones, compared with other services. This is therefore a frustrating setback for Google Wallet."