Google to start NFC payments on thousands of terminals

The mobile payment project will run on Verifone terminals, deployed by Google, at merchant locations. ViVOtech is also expected to participate in the project. Test will later be expanded to Los Angeles, Chicago and Washington, D.C. And First Data is expected to participate in the project, potentially to play the role of the Trusted Service Manager.

One may anticipate that Google’s Nexus S smartphone – the first Android device to ship with built-in NFC functionality – will play a key role in the trial (cf. Smart Insights Weekly #10-50). The Nexus S comes equipped with an embedded Secure Element, but also supports a SIM based Secure Element with Single Wire Protocol (SWP). 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.

Also, Google is building a mobile wallet called "Cream" that would combine with the NFC operation. JP Morgan Chase has already expressed interest in the project under which Google would launch the wallet and enable a mobile-payment and advertising service on NFC smartphones. The Cream wallet is expected to be a default feature on Android phones, just like Google Maps. And just as Maps uses GPS to help render its services, Cream, would have NFC technology as an enabler (cf. SIW #11-02).

Google has recently launched NFC enabled marketing programs in Las Vegas, Portland and Austin, which allows users to swipe their NFC-enabled smartphones against a merchant-displayed sticker to access tourist/business information or special offers (cf. SIW #11-11). The service works in conjunction with the Google Places and Hotpot applications, which allows users to recommend and rate businesses and tourist attractions while allowing businesses to use customized Google kits from the Google Places catalogue to encourage customer participation. Last year, Google bought Zetawire, a Toronto, Canada based startup with a patent on a way to combine a phone-based wallet with a reward-and-loyalty system (cf. SIW #11-02).

At the same time, analysts such as Nick Holland, from Yankee Group, consider that Google strategy is to focus on marketing and on bringing Internet advertising into the physical world rather than on payment. “For Google, the bigger picture would be maybe offering promotions at the point of sale”, he said. Google made more than 95% of its US$ 29.3 billion (EUR 20.6 billion) 2010 sales from advertising.