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

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.

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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

Christopher Dawson

About Christopher Dawson

Chris Dawson is a freelance writer, consultant, and policy advocate with 20 years of experience in education, technology, and the intersection of the two.

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30 comments
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  • The last thing I need is to let the thieves at Google

    have my financial information. No thanks Google... I'll keep my iPhone and my information private.
    iPad-awan
    • RE: Google to test NFC payment systems: Everyone else left in the dust?

      @iPad-awan if you want your information private, you should not be using the iPhone or downloading any apps to it.
      tatiGmail
    • RE: Google to test NFC payment systems: Everyone else left in the dust?

      @iPad-awan

      Yeah privacy is a huge issue as well I don't feel that it is at all private what they are doing more so they can now see everything you buy and profile more of your personality to your name and your accounts... Sounds like the N.W.O. is becoming a reality in baby steps. Good to see... NOT.
      audidiablo
    • RE: Google to test NFC payment systems: Everyone else left in the dust?

      @iPad-awan
      So, you'd rather Steve Jobs has that info? Great.
      You are oblivious.
      Droid101
  • I don't know about this...

    When I first heard about NFC payment systems I was excited, especially since it was first rumored the iPhone was getting it. Now that I see Google getting it I'm a little concerned because Google has been horrible about keeping things secure on there phones.

    The browser is awesome though so I'm sure they will figure it out.
    Graystonia
    • RE: Google to test NFC payment systems: Everyone else left in the dust?

      @Graystonia
      So, you're excited if Apple gets it, but not excited if Google gets it.

      What is wrong with people these days?
      Droid101
      • RE: Google to test NFC payment systems: Everyone else left in the dust?

        @Droid101

        As Graystonia already pointed out... The reason people are leery about Google doing this is because of the abysmal track record Google has with security... On the flip side, Apple and others... like Amazon... have a track record of keeping financial data secure.
        eak2000
  • RE: Google to test NFC payment systems: Everyone else left in the dust?

    Fair doo's to Google, and they will hopefully have 18 months head start on apple on this one, which should be nice.
    But I do like the idea of them buying the equipment, as they will then be able to take a cut of sales. (I know they already have google checkout) but I wonder if this is the start of them moving into banking on a grander scale, move over Barclaycard, here's google!
    Will T
    • RE: Google to test NFC payment systems: Everyone else left in the dust?

      @Will T
      Kind of like Apple taking 30% of subscriptions through them for other people's media? What a concept.
      curtis.lyon@...
      • RE: Google to test NFC payment systems: Everyone else left in the dust?

        @curtis.lyon@...
        yeah kind of, but hopefully it would be more like the cut credit card companies take and rely on volume for profit ie 1-2 % max
        Will T
  • RE: Google to test NFC payment systems: Everyone else left in the dust?

    Google will not go anywhere near my payments. I just can't trust them. First it was their "your data is our data" clause in the browser, then it was their employees snooping on emails. This is going to lead to a lot of credit card fraud.
    Loverock Davidson
    • RE: Google to test NFC payment systems: Everyone else left in the dust?

      @Loverock Davidson
      Are you nuts? Apple has way more credit cards on file than Google.

      Google checkout is safe and has been for years and years. Safer than stupid PayPal.

      You people are so oblivious it's funny.
      Droid101
      • RE: Google to test NFC payment systems: Everyone else left in the dust?

        @Droid101 Google runs ads business, not Apple. So, Google is more intersted in your shopping statistics as they can make their ads business more effective.
        pupkin_z
    • RE: Google to test NFC payment systems: Everyone else left in the dust?

      @Loverock Davidson

      If it isn't secure then it won't be a success, it won't fail because Google is behind it. I would trust anyone more than Microsoft but I'm sure you would full of praise if it were MS.

      No logic, just fan-boy support
      Chipesh
      • Liek you. You would have nothing but scorn

        @Chipesh
        if it was MS the story was about, but fan-boy joy because it's you company of choice
        Will Farrell
      • Lile you? You would have nothing but scorn

        @Chipesh
        if it was MS the story was about, but fan-boy joy because it's you company of choice
        Will Farrell
    • RE: Google to test NFC payment systems: Everyone else left in the dust?

      @Loverock Davidson

      I can't believe I'm saying this, but I agree with you. Other companies may not be as bad... After all, no matter how you feel about them personally, Amazon, Apple, Microsoft, etc have a proven track record of protecting financial information. But Google has a proven track record of "information should be free", even when that information is your personal data.
      eak2000
  • RE: Google to test NFC payment systems: Everyone else left in the dust?

    Horray America for getting technology that Japan has been using for years. On one hand this is great for ease of use, but on the other hand what are the security precautions of someone steals your phone or you lose it? It's like keeping all of your personal info in your wallet and losing that.
    KBot
    • RE: Google to test NFC payment systems: Everyone else left in the dust?

      @KBot
      I think most of these systems eiher have a password you quickly enter into the phone to autorise the payment.
      But thee are several ways it could be done. Either, you enter a password just after you pay for something, a bit like chip-and-pin in the UK.
      Or, you could enter the password just before you pay for something (it would probably have an upper limit on the max cost) then your phone is 'active' for a couple of minuets after,
      or, and his would be a very nice one. On the Motorola Atrix, there is a finger print scanner, it could use this instead of a password
      Will T
      • RE: Google to test NFC payment systems: Everyone else left in the dust?

        @Will T

        Yes, this is most likely a take-off from the 'Bump' technology (since the article mentions this "lets consumers pay for products and services by tapping a device against a register at checkout") that has been around for a while. PayPal has used it since last year (http://mashable.com/2010/08/06/paypal-android/) for mobile-to-mobile transfers... this would just change it from mobile-to-checkout, I would bet.
        jsmiller1