Search engine giant Google is working with Mastercard, Citigroup, and VeriFone to produce a contactless mobile payment device designed to speed up transactions at the checkout counter, according to an article published in the Wall Street Journal, on Monday.

 

The solution would work through a mobile application designed for Google’s Android operating system. When the customer reaches the register at a grocery store, they can wave their phone in front of a payment-processing device and the funds are deducted from the customer’s credit card, which is associated to the application. 

 

The technology at play is simple near-field communication. Similar pilots have been rolled out where NFC chips are embedded into a credit card and payment is debited as customers walk through turnstiles or flash them in front of a register. The benefit of using a mobile phone as the conduit is that the application can communicate with the credit card automatically to add more funds to the account. 

 

So why is Google involved? According to the article, customer data collected by the application will allow Google to better target mobile advertisements to consumers. The company is not planning to take a cut of the transaction fee as part of the arrangement.   

 

According to Payment Processing Inc. CEO Eddie Myers, this is not the future of payments but rather an extension of the current infrastructure that will bring added value and therefore will be of interest to many.  

 

“There is no doubt it will be a component of an ever evolving payment processing landscape that will drive convenience and greater flexibility,” Myers told VSR. “However, in the near term, I think it is doubtful that it will replace the many of the forms of non-cash payment. Check and ACH payments represented 40 percent of the non-cash payments in 2009 according to Federal Reserve Payments study released late 2010.” 

 

The real impact for VARs will be how this new functionality is delivered to the market through independent software vendor applications, Myers explained. These ISVs will rely on their payment integration partners to deliver support for these new payment entry methods.

 

The Journal stated that the program is in its early stages and will involve customers using Citigroup branded Mastercards. Wal-Mart is being cited as a potential partner, but no official announcement has been made.

 

In fact, none of the players are talking about the project. When reached out for a comment, VeriFone sent the following email: "VeriFone cannot comment as it relates to Google. VeriFone is extremely confident of its market position and role in enabling the overwhelming majority of merchants in their move towards NFC in the future, across a wide range of potential services and service providers."

 

Calls to Google were not returned.

 

It was rumored that Apple’s latest version of the iPhone would have NFC capabilities built in, but so far nothing has materialized.