Android smartphones prepped for payments

MasterCard, First Data and Citibank are the leviathans of the banking world that will make the much-anticipated Google Wallet work as a payments product. Google introduced the mobile payment technology at a long expected event in New York overnight.

Google has developed an extension of its Android operating system for smartphones that caters to contactless or near-field communications' payments.

The product is one readied for the US payments market only. Customers with the right type of smartphone (of which there is only one on the market at present) will need a MasterCard issued by Citibank. Citi are also introducing a co-branded pre-paid debit card with Google. First Data is the payments processor.

The Google Wallet platform is open to other banks and any manufacturer of smartphone's that adopt's the Google-owned Android operating system.

Anyone with a qualifying smartphone will be able to make payments at merchants with PayPass terminals. Google says there are 124,000 PayPass-enabled merchants in the US, and more than 311,000 around the world, of which more than 35,000 are in Australia - a number expected to climb as major retailers shift towards making contactless payment an option.

However, demand for contactless payments in Australia for those with the right kind of chip in their credit card or debit card is slight.

Google and its business partners say they expect 50 per cent of smartphones to have NFC chips embedded inside them by 2014.

However, there are few firm leads on whether smartphones manufactured by Apple are likely to join this trend, though some commentary suggests that the iPhone maker does not regard contactless payments as a priority.

Google said it was working with several producers of payments terminals, including VeriFone, Hypercom, Ingenico and VIVOTech, to adapt point-of-sale systems to cater to Google Wallet, according to online tech news site The Register's report on the launch event.

Visa has said it plans to make a corresponding mobile payments system available, initially mostly in the US, later this year.