Google is preparing to launch a mobile payments system in partnership with MasterCard and Citigoup, Inc., according to a report in today’s The Wall St. Journal. The service is the long-rumored mobile venture utilizing NFC (near field communication) technology, which allows customers to wave or tap their phones at the point-of-sale to pay for purchases. Google isn’t taking a cut of the transaction fees, says the report, but would use the system to provide retailers with more data about their customers so they could better target their ads.
The WSJ says the project is still in its early stages, and would initially be available to Citigroup card holders with either debit or credit cards. The cards would be activated for use with the mobile payments system supported handsets like Google’s flagship phone, the Nexus S, developed in partnership with Samsung. The Nexus S includes an NFC chip which enables the phone to use a short-range wireless technology known as near field communication. Not only intended for mobile payments, NFC can be used to exchange any data between two NFC-enabled devices that are in close proximity to each other.
With Google’s system, customers could use their mobile phones to make purchases at participating retailers, track spending on their phone and even received targeted ads and discounts from merchants sent directly to their handsets.