Google to test NFC payment systems: Everyone else left in the dust?

Summary:Who needs Groupon? And Isis? What's that? Welcome to mobile payment processing, Google.

While Google hasn't confirmed reports that it's ready to begin testing near-field communications for payments via users' mobile phones, well-sourced leaks suggest that tests may be right around the corner. According to Bloomberg, in fact, Google may be positioning itself to dominate the market early on.

Bloomberg, among other outlets, notes that Google is purchasing the specialized payment hardware itself in New York and San Francisco where it will be piloting the near-field payment systems:

The company will pay for installation of thousands of special cash-register systems from VeriFone Systems Inc. (PAY) at merchant locations, said [an anonymous source]...The registers would accept payments from mobile phones equipped with so-called near-field-communication technology.

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.

For the Google conspiracy theorists, this is perhaps the best Big Brother fodder the company has handed out to date. For those of us who manage to lose virtually everything besides expensive laptops and beloved smartphones, it's a gift from the technology gods, sent to make our lives easier and more convenient. The Wall Street Journal probably has the best reason for it, though:

Nick Holland, a mobile payment analyst at Yankee Group, said Google's move to facilitate payments through NFC technology would help expand its core advertising business...In the mobile-device world, however, Internet companies are beginning to alert users of special deals at local retailers in their vicinity.

If Google uses the same advertising techniques, Mr. Holland said, NFC technology could help the company prove that ads are leading to sales. And by getting information about what individual mobile-device users are buying, the company might be able to better target ads or offers to them.

"This is about creating an advertising platform for mobile devices," Mr. Holland says.

Oh yeah, and remember Groupon? Google has been providing posters with NFC chips to local businesses that can talk to NFC-enabled phones as users walk by. Currently, only Android-powered phones running the latest version of Google's mobile OS support NFC. But it isn't much of a stretch to imagine how Google could use this sort of technology to make Groupon-style offers happen in real time and make the sorts of inroads with local businesses that, to date, Google has been unable to achieve. When your phone suddenly tells you that people who pay with their NFC-enabled Android phone get a 50% discount on a sandwich at the deli you just passed, Groupon just starts looking a bit frivolous. And your friend walking with you won't be quite so enamored of his iPhone.

So far, even though the major US carriers have partnered with Discover to test their own NFC solution, the only one looking to get off the ground anytime soon appears to be Google's partnership with VeriFone. If other NFC providers don't get in the game quickly, they're going to look a lot like they Yahoo!'s of mobile payment processing.

Topics: Google, Banking, Enterprise Software

About

Christopher Dawson grew up in Seattle, back in the days of pre-antitrust Microsoft, coffeeshops owned by something other than Starbucks, and really loud, inarticulate music. He escaped to the right coast in the early 90's and received a degree in Information Systems from Johns Hopkins University. While there, he began a career in health a... Full Bio

zdnet_core.socialButton.googleLabel Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.