Google to Test NFC Mobile Payments from Android Smartphones

Google is allegedly testing NFC-based mobile payments on special terminals made by Verifone in San Francisco and New York this year. That would give Google a leg up on Apple.

Google will test mobile payments at stores in New York and San Francisco, the company's latest bid to improve the user experience on Android smartphones.

Bloomberg reported March 15 that the search engine will pay to have thousands of cash registers from VeriFone Systems installed at various businesses.

These sales terminals would accept payments from Android smartphones fitted with chips and software based on NFC (near field communications), the short-range wireless technology used to enable communication between sensors brought within close proximity of each other.

The project, which Google declined to confirm, hardly comes out of nowhere. Google CEO Eric Schmidt in November said the Android 2.3 :Gingerbread" build would include NFC to allow consumers to take phones equipped with Gingerbread, tap them against objects and machines with NFC sensors to enable wireless data exchange, including the payment of goods in stores.

Google in December launched the Samsung Nexus S smartphone, the first based on its new Android 2.3 "Gingerbread" operating system, which has native NFC support.

Google began testing NFC from the Nexus S in Portland, Ore., but reading was limited to posters and signs. One month later, a job posting for an NFC specialist popped up on Google's careers Webpage.

Now, Google could test fly NFC on Gingerbread handsets within the next four months, according to Bloomberg.

Verifone and Google declined to comment on the speculation.

It's easy to grok why the search engine would want to its users leveraging NFC on Android handsets. Such mobile payments are sort of a frictionless Holy Grail, allowing consumers to use their phones instead of lugging around credit cards in wallets.

Google, locked in tough competition with Apple in the mobile phone market, wants to lure as many developers and users to Android devices as possible.

NFC capabilities provide a compelling new opportunity for developers, who could charge for apps that enabled wireless payments from smartphones in stores. Good apps will bring in more end users, who will in turn be served more ads on Google's ad network.

While slow to materialize in the U.S., the market for mobile payments using NFC is huge in Japan and in parts of Europe despite the lack of a solid standard. For this reason, among others, stores have been unwilling to implement NFC-enabled computer systems.

Yet analysts expect the NFC-based mobile payment market to boom to multi-billion-dollar figures over the next few years, propelled by the AT&T and Verizon Wireless-backed ISIS platform.

Research in Motion and Nokia are all working hard on building NFC systems. Apple was also rumored to be prepping NFC for the iPhone 5, but a new report from the Independent noted that the company is holding off because of the lack of an industry standard.