Online computing represents probably the first new platform in thirty years. Not since the PC have we seen a whole new hardware-software-solution-product environment emerge. It's understandable that there's a mad land grab for app-driven market share.
But you'd think that the rush to market would be moderated by a realisation that we ought to be building security into the platform from the start and not repeating the awful misadventures that continue to plague PCs. I don't need to turn this post into a
lecture, for it's widely known that general purpose PCs and Internet protocol for that matter were never engineered to be properly secure, and yet we pile them high with payments applications that totally evade the standards and regulations that keep POS,
ATMs, interbank settlements and so on safe.
Now, the mobile platform has all the right attributes to make safe the next generation of consumer payments. In particular, NFC devices come with "Secure Elements": certifiably secure tamper resistant chips in which the crypto-magic happens, and where the
mission critical apps run. The Secure Element is a god send. And it is supported in the NFC architecture by Trusted Service Managers (TSMs) operated by telcos and which securely transfer critical data and apps from verified partipants (like banks) into the
consumers' devices. The TSM is a lot like the GSM personalisation infrastructure that governs SIMs worldwide, to secure mobile phone billing.
So NFC is so much more than the radio link that allows your device to 'send money' to a cash register. So much more.
The first NFC mobile phone wallets used the Secure Element as the fit and proper place to hold your account details. But now Google wants to shove credit card numbers up into the cloud. It seems that loading CCNs one by one into the Secure Element of the
phone is all too hard for them. This move looks to me like a cynical and hasty security concession for the sake of convenience. And why? It beats me why thoughtful implementation of a TSM wouldn't allow new CCNs to be provisioned to the Secure Element of
any participating NFC wallet as easily as new phone number are set up in a SIM. There's nothing in the tech that stops sensitive data being provisioned almost instantly, over the air into NFC phones.
Of course, there are other reasons for Google to prefer the cloud to silicon. They might for example seek to disintermediate the TSMs. Even more strategically, they generally prefer as much user information to be on their servers as possible, where they
reserve the right to mine it. After all, it is said that information about how people use money is more valuable these days than the money itself.
It's astonishing that we wouldn't use Secure Elements for Card Not Present m-commerce transactions. We have literally a once in a generation opportunity to forge a really safe cyber payments environment. Let's not blow it.