Ever since Google launched the Nexus S with NFC support, there has been speculation that it was planning to jump into the mobile payments arena. It seems that Google has already been working on such a mobile payment system, according to a report by WSJ.
It has teamed up with Mastercard and Citigroup to create a system which would allow Android smartphone users to make purchases by waving their smartphones before a small reader when checking out. In the early stages, the mobile app will be available only for Citigroup credit/debit card users.
Google will use readers by Verifone, which is a major player in the mobile payments segment. The mobile payments app will be made available for “one current model and many coming models of Android phones”. The current model is most likely the Nexus S, since it is the only one to have NFC support.
Google will be handling all the shopping cart data as well as the shipping information. Google won’t be charging any transaction fee for acting as the intermediary, but it will be able to send targeted ads and offers to users of its application. If this service attracts a lot of users, Google will have access to a treasure trove of personal information. Google has also applied for a patent for a “distributed electronic commerce system with centralized point of purchase”.