Google Expected to Introduce a Wireless Payment System

Google is expected to introduce on Thursday a mobile payment system that will let shoppers wave their phones to pay instead of pulling out a credit card, according to people briefed on the announcement.

Google will offer mobile payments with MasterCard and Citibank, according to one of the people, as well as with cellphone carriers, hardware manufacturers and retailers.

Initially, the mobile wallets will be available only on Google’s Nexus S phone and will use a Citibank-issued MasterCard credit card number and a virtual Google MasterCard prepaid card. Consumers will be able to make payments at any of the 124,000 merchants that have MasterCard’s PayPass terminals, which accept contactless payments, a person briefed on the deal said.

The people familiar with the deal were not authorized to speak until the deal was publicly announced. The news of the announcement was first reported by Bloomberg News.

The three companies have also teamed up with a few retailers — Macy’s, American Eagle Outfitters and Subway, a person familiar with the deal said. After these retailers upgrade their terminals — at first, only retailers in New York and San Francisco will participate — consumers will also be able to redeem discounts and participate in loyalty programs.

While several companies have been working on mobile wallets for years, they have not yet been widely adopted because all of those involved need to agree on how the wallets will take shape and how the various stakeholders will get paid. Mobile phone carriers, banks, credit card issuers payment networks and technology companies have been battling over their roles.

“Google is dipping their toe into the water and it will accelerate other efforts from other providers,” said Rick Oglesby, a senior analyst at the Aite Group, a research and advisory firm focused on the financial services industry.

Google plans to use a technology called near-field communication, or N.F.C., which is incorporated into a chip in mobile phones to make payments, redeem coupons, earn loyalty points and receive special offers. When a phone is waved in front of a credit card reader, it wirelessly sends an encrypted signal with a person’s credit card information. After that, the transaction is processed like a normal credit card transaction at a store.

Google’s announcement has been expected since it introduced the latest version of its Android mobile phone software, which has the capacity for N.F.C., and its Nexus S phone, which includes an N.F.C. chip.

Representatives for Google, MasterCard, Citigroup and Sprint, a carrier for Google’s Nexus phones, declined to comment.

Sony: Credit card data at risk in PlayStation hack

Hackers who broke into Sony's PlayStation Network online service might have stolen members' credit card information, Sony said Tuesday.

The intrusion, which happened between April 17 and 19, has resulted in a week-long system outage that could last as long as another week. As many as 75 million users globally use the network to play online games together and download movies, TV episodes and game demos.

Sony says it will send an e-mail to all account holders advising those who gave their credit card information to either PSN or Sony's new Qriocity music system that hackers may have gotten their credit card number and expiration date but not the card's security code. "While there is no evidence at this time that credit card data was taken, we cannot rule out the possibility," Patrick Seybold, senior director of corporate communications and social media, said in a statement on Sony's official PlayStation blog.

"An unauthorized person" did get users' personal information including birth date and e-mail addresses, he said. In the wake of the security breach, PSN members should be alert for e-mail, telephone and postal mail scams that ask for personal or sensitive information, Seybold said.

Users should change the passwords on other services and accounts that might use the same user name or password as their PSN account. "We encourage you to remain vigilant, to review your account statements and to monitor your credit reports," he said.

Consumers should heed Sony's advice, says Tim Rohrbaugh, vice president of information security for Intersections, an ID theft protection and risk management firm in Chantilly, Va. "On something like a PlayStation or (Internet-connected) TV, you can't use the same password that you use on your bank account or the accounts where a lot of damage can happen," he says.

Some users criticized Sony on social networks and forums for not coming forward with information about the breach sooner. But Rohrbaugh applauded Sony for a quick response. "The average amount of time it takes for a company to find an unauthorized access is six months-plus," he says.

The Sony breach and another earlier this month at Epsilon, which provides e-mail marketing for 2,500 companies, is "a wake-up call" to pay attention to what is going on with your data, he says.

The outage comes at a bad time for Sony. Hot titles such as Valve Software's Portal 2, Warner Bros. brawler Mortal Kombat and PlayStation 3 exclusive Socom 4 all hit stores last week.