WSJ reports that Google may be teaming up with MasterCard and Citigroup to set up a payment system based on Near-Field Communications. This would allow Android users with NFC-capable devices to make payments with a simply wave of their mobile device.
According to “those familiar with the matter,” Google wants to make mobile payments easier in order to get more ad revenue. They would be able to tie the mobile payment system with other data about users and provide a way for advertisers to better target ads and offers.
Part of the system would involve an Android app for Citigroup-issued debit and credit cards which would allow users to discover nearby deals, make payments, and manage their accounts.
Another key piece of the puzzle will come from VeriFone Systems Inc., who provides credit-card readers for cash registers. By rolling out more readers with contact-less/NFC support, it will be easier to build out the payment network. Customers who already have the technology built into their credit cards will benefit, as well as owners of new Android devices with NFC chips.
Google is not expected to make any revenue from the card transactions. While the NFC technology might appear less secure because it is transferring data over-the-air, it’s actually at least as secure as current credit card technology.
“Because it’s contact-less there’s a perception people can grab it from thin air, but it’s actually a more sophisticated technology than credit cards with a magnetic stripe, making it more difficult to steal a consumer’s payment information.” — Nick Holland, mobile-transactions analyst at Yankee Group
World mobile leaders have already backed NFC technology. RIM has also promised to use NFC in upcoming handsets. Being able to control a large mobile payment network is also a goal that Apple is said to be pursuing. The market for mobile payments is expected to reach $618 billion by 2016, according to a report by consulting firm Edgar, Dunn & Co. and sponsored by MasterCard. Google is definitely trying to strike while the iron is hot and expand their reach for connecting with advertisers and local retailers.
“A phone is a lot smarter than a card. It opens the door to a rich experience at the point of sale that retailers really covet.” — Doug Bergeron, VeriFone’s chief executive
via WSJ