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Google gets into tap to pay

By Marcie Geffner · Bankrate.com
Wednesday, June 1, 2011
Posted: 3 pm ET

Google News. Google Maps. Google Docs. And now, Google Wallet?

Yes, you read that right. The search engine giant has announced a new service that will turn a cellphone into a "wallet," allowing consumers to forgo their credit cards and instead tap the phone to pay when they shop at bricks-and-mortar retailers and other merchants.

The service is being tested in New York and San Francisco with a wider rollout scheduled for this summer.

So far, Citi, MasterCard and Sprint are on board, making Google Wallet available first to consumers who have a Nexus S 4G phone on the Sprint network and a PayPass-eligible Citi MasterCard or a virtual Google Prepaid card. The Citi MasterCard can be added directly to Google Wallet, while any payment card can be used to fund the Google prepaid debit card.

PayPass is a MasterCard point-of-sale service for merchants that enables consumers to tap to pay. Only a relatively small number of U.S. merchants, about 124,000, use this system. Terminals are identified by an oval-shaped logo that includes a hand holding a credit card and four expanding curves like an increasing volume indicator.

Google Wallet uses near field communication, known as NFC, to make payments by tapping an enabled phone on a PayPass-enabled checkout terminal. An app-specific personal identification number, or PIN, will be required. Payment-card credentials will be encrypted and stored on a chip that's separate from the device's memory and accessible only by authorized programs, the companies said.

Other banks, payment networks, mobile carriers, handset manufacturers, point-of-sale systems companies and merchants have been invited to join the Google Wallet tap-to-pay initiative, so expansion could be in the future.

Naturally, Google is also testing search-advertised deals and discounts on the service.

"Whenever you buy or save an offer, you'll be able to automatically sync it to Google Wallet," the company explained in a statement. "At most stores, you'll be able to use Google Wallet to show your offer at the register, where the cashier will either scan it or manually type it in. At participating Google SingleTap merchants, you'll be able to pay and redeem an offer with one tap of your mobile device."

Follow me on Twitter: @marciegeff

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