Google teams with MasterCard and Citigroup for NFC mobile payments

Google is working with MasterCard and Citigroup on the introduction of NFC mobile payments services, the Wall Street Journal reports:

Google Inc is teaming up with MasterCard Inc and Citigroup Inc to embed technology in Android mobile devices that would allow consumers to make purchases by waving their smartphones in front of a small reader at the checkout counter, according to people familiar with the matter.

The Internet giant is aiming to make mobile payments easier in a bid to boost its advertising business. The planned payment system would allow Google to offer retailers more data about their customers and help them target ads and discount offers to mobile-device users near their stores, these people said. Google isn’t expected to get a cut of the transaction fees.

The project, which is in its early stages, would allow holders of Citigroup-issued debit and credit cards to pay for purchases by activating a mobile-payment application developed for one current model and many coming models of Android phones. The idea is to turn the phones into a kind of electronic wallet.

These phone users also would be able to get targeted ads or discount offers, which Google hopes to sell to local merchants. They also could manage credit-card accounts and track spending through an application on their smartphone, the people said. The venture also involves VeriFone Systems Inc, which makes credit-card readers for cash registers.

Earlier this month, Bloomberg reported that Google is planning to begin an NFC mobile payments trial in stores in New York and San Francisco within the next four months.

MasterCard is actively involved in the development of NFC payments services and has run NFC field trials in a number of countries around the world. Citigroup’s 2010 pilot in the Indian city of Bangalore is one of the largest to date while, last week, Verifone explained that its new POS terminals will be able to support a huge array of NFC services, from traditional card payments to new payments services, couponing applications and more.

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