Google (NAS: GOOG) is expected to officially launch its Near Field Communications-based contactless payment program today, enabling consumers to make purchases by tapping their Android smartphone at all 300,000-plus MasterCard PayPass-enabled merchant terminals.
According to documentation sent to partners and obtained by TechCrunch, Google Wallet will go live today across all Sprint Nextel (NYS: S) Nexus S smartphones running Android OS version 2.3.4. For now, only PayPass-enabled Citi MasterCards may be loaded to Google Wallet -- the digital wallet solution also features a Google prepaid MasterCard that consumers may fund with any existing payment card. Debit cards are not eligible for Google Wallet at this time. GigaOM also posted a photo of a San Francisco-area Peet's Coffee Shop depicting a PayPass terminal with a placard urging consumers to "Tap and pay by smartphone using Google Wallet."
Google Wallet was first confirmed in late May when Google announced it would partner with Sprint and financial services providers MasterCard, Citi and First Data to enable subscribers to purchase goods and redeem coupons and loyalty rewards via Android smartphones. Comprising two complementary applications -- Google Wallet and Google Offers -- the m-commerce solution promises an open ecosystem, with Google planning to develop APIs supporting integration with multiple partners. "We want to invite banks, carriers, merchants and POS system providers to help bring about these richer experiences," said Google VP of payments Osama Bedier during the launch event.
Google vows that consumers can provision their credit card to their Android phone in seconds -- the user submits the account data to the card's issuing bank, which verifies the information with First Data, which then authorizes the phone for payment use. Google stresses that the Nexus S also includes the NXP PN65 chip, the same security technology embedded into contactless credit cards and passports and touts safeguards like tamper sensors -- moreover, the chip is activated only when the wallet is manually unlocked, guaranteeing against misuse.
Google Offers expands the platform beyond purchases. The application enables consumers to store coupons, loyalty cards and gift cards within their phone -- when users tap to pay, the device will automatically redeem offers and earn loyalty points. Google has said it hopes to eventually expand the solution to boarding passes, event tickets, ID cards and keys.
Google first introduced support for proximity-based NFC capabilities with Android 2.3.3, released in February 2011. That same month, then-Google CEO Eric Schmidt called mobile payment services and NFC transaction technologies a "megascale opportunity."
A survey published by MasterCard earlier this year indicates that 62 percent of U.S. mobile subscribers are open to making purchases using their phones. Respondents between the ages of 18 and 34 are driving interest in m-commerce, with 63 percent stating they would be at ease making mobile-enabled purchases, compared to 37 percent of respondents 37 and older -- in addition, 65 percent of users between 18 and 34 say they feel more naked without their phones than without their wallets, compared to 34 percent of those 35 and up.
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