Google announced Thursday Google Wallet, a near field communications (NFC) payment system that will turn an Android device into a mobile payment system. Wallet is being introduced in San Francisco and New York City as test markets, and it was developed with Citibank, Mastercard, Sprint and First Data.
Wallet will allow users to pay for their transactions using their Android device through the Google Wallet app. Such payment solutions have been a hot topic for the last couple of years as NFC implementations have begun rolling out outside the U.S., especially in Asia. Handset makers, banks, and telecoms see the use of NFC solutions as money making operations, and both Apple and Google have been rumored to be developing NFC payment systems for their smartphone platforms.
Google’s announcement Thursday means that the Android maker is first to market, though with a limited test run, it’s far from a fully implemented system. In addition, NFC payment solutions not only require secure software, they also require both smartphone hardware and merchant hardware to be able to conduct the transactions.
To that end, Wallet is being rolled out as a hook into Mastercard’s existing PayPass network. Mastercard claims 124,000 PayPass-enabled merchants nationally and more than 311,000 globally, though it’s not yet clear how many of those merchants have the NFC gear needed to make use of Wallet.
In addition, the only Android device capable of making use of Google Wallet is the Nexus S 4G, an Android device for Sprint’s network. T-Mobile also has a Nexus S, but that version of the device was not included in today’s announcement, which focused on Sprint.
Google Wallet is not, however, intended to be limited to Citibank and Sprint. In its announcement, the company said, “Google Wallet will work best if it’s an open commerce ecosystem so you will be able to carry all the credit cards, offers, loyalty and gift cards you choose—and eventually much more. To this end, Google Wallet will make it possible to integrate numerous types of partners, and Google, Citi, MasterCard, First Data and Sprint invite the banking community, mobile carriers, handset manufacturers, merchants and others to work with Google Wallet.”