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What Nobody Knows, Can’t Hurt You

November 16, 2010

When internet titan Google speaks, the marketplace tends to listen.  Thus far, Web 2.0 Summit in San Francisco has been no exception.  During his forty-five minute conversation with conference moderators, Google CEO Eric Schmidt discussed the vast array of technological innovations his organization has been hard at work developing.  While the list was long and undoubtedly interesting, Google’s foray into the world of wireless payments was of particular interest to me.

As a payments expert, working for a technology firm focused on making payments more efficient, secure, and cost-effective, I am well acquainted with pairing greater efficiency and enhanced security.  This balancing act was on display at the Web 2.0 Summit as well, as Mr. Schmidt carefully navigated questions related to Google user’s privacy while sharing that Android-enabled Smartphones (using an OS created by Google) will soon come equipped with “tap-and-pay” functionality.  Now, rather than being bogged down with numerous credit cards, Android owners are able to use their cell phones for common, everyday purchases.  While convenient and rife with potential, how much information, as well as what type of information, are individuals comfortable sharing with internet companies like Google, or Facebook?

For years, consumers have been told that they days of paper-based currency are numbered.  Gone are the days of Ben Franklin’s and Andrew Jackson’s; the age of the debit card has arrived.  However, as debit cards are being replaced by data collecting devices like Smartphones, are the days of consumer privacy gone as well?

As we approach the holiday season, I am reminded that the benefits of cash reach beyond often-assumed clandestine purposes.  Rather than making attempts to hide the countless “recommended product” spam messages, forwarded to my email inbox via online retailers after purchasing Christmas gifts for my wife, cash enables me to guard my privacy and thereby deliver holiday surprise.  Couple the advantages of anonymity with the growing unbanked population in the United States and its plain to see why cash is here to stay.  However, the question remains: how can consumers and retailers alike enjoy the benefits of cash (anonymity, funds availability, etc.) while lowering the cost of handling and securing the physical currency?

http://money.cnn.com/2010/11/15/technology/google_schmidt_web2/index.htm

~Jeff Hauser

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