Google Working on Smartphone-Based Payment System

By Beecher Tuttle January 04, 2011

Google is reportedly in the process of developing a retail payment service that would enable users to make purchases using just their smartphone, two sources close to the situation told Bloomberg News.

Employing near-field communication-based (NFC) technologies, the prospective service would let consumers purchase items by simply scanning their Web-enabled handset at a store's checkout counter. Mobile phones that contain an NFC chip would be linked to credit cards, bank accounts, gift cards and even coupon subscriptions. Google would most likely monetize the service by integrating it into its advertising platform.

"You'll be able to walk in a store and do commerce," Google's chief executive officer Eric Schmidt said of the technology late last year. "You'd bump for everything and eventually replace credit cards."

By entering the NFC market, Google will be competing directly with financial companies and communication outfits that are looking to take advantage of the expected growth of the mobile payment space. With Visa, MasterCard, Bank of America, Paypal, AT&T, and Verizon all currently vying for market share, the mobile payment service industry is expected to process $1.13 trillion in transactions by 2014, according to IE Market Research.

Officials with EBay and Isis, the mobile commerce network recently formed by AT&T, Verizon and T-Mobile, told Bloomberg Businessweek that they are each considering rolling out NFC-based services.

"It's a land grab," Jaymee Johnson, a spokesman for Isis, told the news source. "Folks are sort of jockeying for position."

Laura Chambers, senior director of EBay-owned PayPal Mobile, noted that the online payment provider could launch a similar service sometime before the end of the year.

For Google, rolling out an NFC-based payment and advertising service makes a great deal of sense. The company's Android-based mobile operating system is the second most utilized OS in the world and already has some built-in NFC functionality. Handsets like the Samsung's Android-based Nexus S phone are currently capable of enabling NFC transactions.

Officials with Google declined to comment on the story.

Beecher Tuttle is a TechZone360 contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf

TechZone360 Contributor

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