Appolicious powers Verizon Educational Tools

The Android-powered “digital wallet” raises security questions

by Caitlin M. Foyt

It won't be long now before your Android phone will act like a fully functioning digital wallet.

The idea behind mobile payments is that all of your credit or debit card information will be pre-programmed onto your phone, so when it's your turn to cash out at the drug store or the coffee shop, you'll just simply wave your phone's screen at the merchant's counter sensor and then be on your way.

Google (GOOG) looks to be teaming up with MasterCard (MA) and CitiGroup (C) in an official attempt at a service that will have customers ditching their plastic, whether they're at the grocery store or shopping online.

According to a recent article in a recent article in The Wall Street Journal, this project would link Citigroup credit and debit cards to a mobile-payment application that would fit the current Android OS and future iterations.

Mobile payments could mean that my days of holding up the line as I rifle through my enormous purse, in search of my wallet, may soon be over.

Of course there is a trade-off

While that does sound very appealing (I'm not much of a fan of feeling those eyes burning into the back of my skull), I have to admit that the first thing that popped into my head as a consumer is whether or not this is safe.

What happens should I lose my phone? Even if my accounts are password encrypted, the fact that all of my important credit card information is stored on a phone that's no longer in my possession is just a bit scary to me.

Then I can't help but jump to the conclusion that in time, it will become the norm for us to automatically sync up our account with our phones. It may make me sound like a bit of a paranoid, but this is where I have to note that I don't and have never doubted the abilities of a practiced hacker.

This all doesn't even take into the account the fact that in this kind of situation, having lost my phone, I'd now suddenly be without a lifeline. I wouldn't even be able to call the bank to report that my credit card was MIA.

While it will interesting to see how this technology develops over the next several months, Google, MasterCard, CitiGroup and the various other companies who are starting up similar ventures will have to demonstrate why I shouldn't fear identity theft before I will be sold on the idea.