More details on Google's Android mobile payment system

By on March 28, 2011, 9:00 AM
Google is teaming up with MasterCard and Citigroup to allow Android users to make purchases with their smartphones at checkout counters. The venture also involves VeriFone Systems, which makes credit card readers for cash registers, and preliminary discussions have already begun with Wal-Mart. Although Google isn't expected to get a cut of the transaction fees, the planned payment system would allow Google to offer retailers more data about their customers and help them target ads and discount offers to mobile-device users near their stores, according to people familiar with the matter quoted by The Wall Street Journal.

We've known Google has been interested in Near Field Communication (NFC) technology ever since the release of Android 2.3 (codenamed Gingerbread). NFC gives consumers an alternative to cash, debit cards, and credit cards by allowing them to pay for products and services by tapping their mobile device against a register at checkout.

The project is still in its early stages, but it will one day allow owners of Citigroup-issued debit and MasterCard credit cards to pay for purchases by launching a mobile-payment application on their phone. Users could also manage credit card accounts and track spending through said app. Google, for its part, would be able to send targeted ads or discount offers to these users. If the program is deemed a success, it would likely expand to other card issuers and networks.

The program would also offer retailers access to data about customers so they would be able to market future offers to their devices. This would, of course, raise privacy concerns since Google would have data as to whether ads targeted at certain groups of people led directly to in-store sales and would be able to gain insight into consumer-spending behavior.

A rumor from earlier this month suggested that Google is planning to start testing an NFC system next quarter. The search giant is not the only company working on mobile payment methods, but given Android's growing dominance, Mountain View has an opportunity to set the bar high.

Image credit: GamingAngels.

User Comments: 6

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MilwaukeeMike said:

I don't understand how this provides a consumer with any greater convenience than using a CC. My phone is just in a different pocket. CC scanners are everywhere and the Square ( is trying to get them into the hands of even more places like street vendors. Is this supposed to compete with the iPhone square? But the square receives payments and is meant to turn the iPad or iPhone into a POS terminal. There seems to be a need for that.

I have an andriod phone, but i can't think of a reason to use this. maybe i don't get it...

TorturedChaos, TechSpot Chancellor, said:

I guess the spending tracking on the phone could be rather nice, especially if it sent you a list of items you just bought, and the cost for each. You could use the app to see how much you spend on food each month or compare prices for items you buy regularly.

MilwaukeeMike said:

good idea Chaos, but there are already apps for that . has an app, all my accounts are listed on it, and it takes less than a min to bring up a graph of my grocery costs for 2010 by month. the phone isn't the best medium for all that info, but its available.

I'm not against more convenience, i just don't understand why i should use it. I'm hoping there's a cool reason to get excited about, like vending machines or something.

Nima304 said:

Not particularly useful, but great if you forget to bring your credit card somewhere.

Lokalaskurar Lokalaskurar said:

There is one obvious problem with this kind of wireless network technology. Not security-related, but purely related to money. If Google starts making big bucks on this system, then other credit card companies and smartphone-manufacturers will surely catch on - and create their own, Google-royalty-free system. Ka-wham!

We're back at one of the most crucial errors of credit cards; certain stores accept certain cards, certain wireless-paying stores can potentially accept only certain wireless-paying systems = incompability = me go sad face .

Arris Arris said:

I'm kinda in the same boat as MilwaukeeMike. I can see how it's "neat" and "cool", but don't really see how it's much more convenient than just having a card on you. Plus at least if you lose your wallet with your cards in it you can use your phone to call your friends/family to lend you money, card, pick you up, report your wallet lost to the police. If you have phone + cards in one, and lose that, you are doubly screwed. And if you are still carrying the card as well as the phone, then what's the point? As MM said there are already services that provide purchase tracking/stats etc. and credit cards(debit & bank cards too?) with contactless tech/NFC in them...

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