Tuesday, January 4, 2011
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BusinessWeek is reporting that Google is planning to launch a mobile-payment service based on near-field communication (NFC), enabling payment via cellphone at retailers.
Google joins several other companies with similar plans. Late last year, Verizon, AT&T, and T-Moble unveiled Isis, their own plan for NFC payments due in mid-2011, and eBay is said to be working on a system where phones could beam PayPal payments, also due later this year. NFC is a technology that communicates only over very short ranges—a matter of inches—and is built into very few phones currently on the market.
The report, based on anonymous sources, lines up with recent comments from Google CEO Eric Schmidt. "You'll be able to walk in a store and do commerce. You'd bump for everything and eventually replace credit cards," he said at a technology conference in November.
In addition, Google has made some acquisitions that would help with an NFC system. It recently snapped up Canadian startup Zetawire, which has a patent on combining a customer-loyalty system with a phone-based wallet. Google's venture-capital arm has also invested in Corduro, which develops mobile-payment systems.
Even though phones with NFC are a rarity, one of them is the Nexus S, an Android phone made by Samsung. Also, Gingerbread, the most recent version of Android for smartphones, has some NFC-specific features. Window stickers for Google Places, the company's recommendation engine, will have NFC tags built in.
Still, putting NFC tech in some posters and getting thousands of retailers to play along are two different things. The Isis partnership between three major mobile service providers is a powerful competitor in the race to bring NFC payments to the masses, though Google has relationships with those same companies to market its Android devices.
In all likelihood, the system that ultimately takes mobile payments mainstream will be a partnership between several companies. NFC technology has had several false starts in recent years, but it's seeing more interest from major corporations recently than ever before. 2011 could be its breakout year.
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