Google Ready to Test NFC-based Mobile Payment System in New York, San Francisco

Google plans to begin testing NFC-based mobile payments at selected stores in New York and San Francisco. "The company will pay for installation of thousands of special cash-register systems from VeriFone Systems Inc. (PAY) at merchant locations, said one of the people, who requested anonymity because Google's plans haven't been made public. The registers would […]

Google plans to begin testing NFC-based mobile payments at selected stores in New York and San Francisco. "The company will pay for installation of thousands of special cash-register systems from VeriFone Systems Inc. (PAY) at merchant locations, said one of the people, who requested anonymity because Google's plans haven't been made public. The registers would accept payments from mobile phones equipped with so-called near-field-communication technology," reports Bloomberg.

Samsung-built Google Nexus S (Gingerbread) is NFC enabled, as will be virtually all Android phones going forward.

Google's mobile-payment service would face competition from EBay's PayPal and ISIS, a joint effort of several mobile companies. The ISIS system, backed by AT&T and Verizon Wireless, will rely on Discover Financial Services to handle the payments. ISIS plans to test its mobile service this year, a person familiar with the trial said.

The project would put Google in a growing field of companies experimenting with NFC, which lets consumers pay for products and services by tapping a device against a register at checkout, giving them an alternative to cash or physical credit cards. The Google service may combine a consumer's financial account information, gift-card balances, store loyalty cards and coupon subscriptions on a single NFC chip on a phone.

Tracking to the point of sale:

Google's Checkout payments platform has had only modest success to date. That lack of penetration has hurt Android developers and Android app monetization. It has forced Google and carriers to try and offer alternative payment options.

A compelling payments experience from Google could change all that. Google would also have access to customer purchase behavior individually and in the aggregate. That would enable all kinds of things including AdWords and display ad tracking to the point of sale and potentially beyond.

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