Google Preps Android Mobile Payments with Nexus S, NFC

Google is expected to introduce a long-awaited mobile payment system with Sprint, Mastercard, Citibank and VeriFone Systems at an event in New York City.

Google's long-rumored mobile payment system is expected to come to fruition May 26, with company officials demonstrating a service that lets users purchase goods, cash in coupons and do other tasks with their smartphones.

The mobile payment platform, which will be demonstrated May 26 in Google's New York office, will leverage the NFC (near field communications) technology on Samsung Nexus S 4G handsets offered by Sprint, according to Bloomberg and other reports.

The service will debut in five U.S. markets: New York, San Francisco, Los Angeles, Chicago and Washington, D.C., Bloomberg said. Reuters said participating retailers include Macy's and American Eagle Outfitters and the Subway sandwich franchise.

These retailers will use upgrade cash registers from VeriFone Systems capable of reading and responding to NFC.

The service will use a Citibank-issued MasterCard credit card number and a virtual Google MasterCard prepaid card, according to The New York Times. Consumers will be able to make NFC payments at any of the 124,000 merchants that employ MasterCard's PayPass terminals.

NFC is a wireless protocol that enables communications between sensors brought within close proximity. The technology is widely adopted in Japan, where consumers simply wave their mobile phone in front of an NFC reader at check-out counters.

NFC has yet to catch on in the United States, with retailers slow to adopt the required readers and other infrastructure. Google and its partners aim to change that.

Google expects that over time software developers will write mobile applications that take advantage of NFC. Google would then pair ads, as well as local deals and discounts, with these services.

Google CEO Eric Schmidt last November waved around a smartphone he said was fitted with NFC technology.

Google in December revealed the device as the new Samsung Nexus S, running the company's latest Android 2.3 "Gingerbread" operating system. Gingerbread includes native support for NFC, which requires a special controller chip to operate.

The Nexus S 4G smartphone, launched by Sprint earlier this month, also carries such a chip.

Google in March was widely reported to be working with credit card providers MasterCard and Citigroup to let consumers make purchases by waving their smartphones at VeriFone terminals in selected retail stores in New York and San Francisco.

May 26's event in the city marks the expansion of that program.