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Google, MasterCard offer 'Google Wallet' to allow consumers to pay with smartphones

May 26, 2011 |  9:57 am

Google-pay

Google Inc. is getting into your wallet.

The company unveiled its "Google Wallet" product on Thursday, a digital billfold that will allow consumers to pay simply by tapping their smart phones when it's time to check out at grocery stores and retail locations around the U.S.

The company will release the service, which will be an app on Android phones, this summer and is now starting field tests in certain U.S. cities, including New York and San Francisco. Google is partnering with credit card giant MasterCard, megabank Citi and wireless carrier Sprint to build the platform that will let users securely pair credit cards to their phones, and then use the phones for in-store purchases.  

The development signals Google's entrance into a fast-growing mobile payments world in which phone manufacturers, wireless carriers, banks and payment processors are clamoring to allow users to get rid of credit cards -- and eventually cash -- so everything they need to pay will be kept on their phones. 

"We believe the shopping experience hasn't yet been transformed by technology," said Stephanie Tilenius, Google's head of commerce and payments. "With smart phones, geotargeting and NFC, we're about to embark on a new era of commerce where we bring online and offline together."

NFC is near-field communication, the radio technology that allows phones to talk to credit card terminals through the air. Google's Nexus S phone is one of the first smart phones to have a built-in NFC chip -- and that phone will be the first to work with Google Wallet, on the Sprint network. (A number of Nokia handsets have also had the capability for some time.)

Google said the system would work at more than 120,000 MasterCard "Paypass" locations around the U.S., including those at Subway, Macy's, Walgreen's, Toys R Us and American Eagle.

Google executives said that, more than simply allowing users to pay with their phones, the digital wallet would enable people to apply coupons and discount offers, use a customer loyalty card and store a digital receipt -- all with one "tap" of the phone.

Google's vice president of mobile payments, Osama Bedier, gave a staged demonstration in which he purchased a pair of American Eagle jean shorts with his phone, applied a 20% coupon and used his customer loyalty card. The transaction quickly went through as he pressed his phone against the payment terminal. 

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-- David Sarno

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