Google to embrace NFC in Android with new payment service

Google is said to be working on a mobile payments solution with Citigroup and MasterCard which would bring so-called near-field communication (NFC) technology to Android smartphones, the Wall Street Journal reported on Monday. The announcement would only be the latest announcement in what seems to be growing momentum for the technology.

NFC support was enabled in December as part of the Android 2.3 "Gingerbread" update. Currently the only widely available Android phone with support built in is the Samsung Nexus S, although several NFC-equipped devices are expected this year.

Mobile operators are also showing interest in the platform: last fall, the four major cellular networks teamed up on a service called Isis. In that case, Discover would process the payments. Tests of the service are expected to begin later this year.

Apple has been oft-rumored to be considering NFC in its next iPhone, so Google's move could be seen as a strategy aimed at ensuring the Android platform stays on par with its biggest competitor. It appears that the payment service would also be aimed at boosting Google's advertising business.

For example, Google would use the payment system in conjunction with discounts and targeted ads, which businesses would pay for. Google would not take a cut of any transaction fees, so this would likely be how the Mountain View, Calif. search giant would monetize the service.

At least one retailer, Walmart, confirmed that it had been briefed on Google's plans. The talks were said to be preliminary though, and the company was not asked to commit to supporting it.

Citigroup credit and debit cardholders appear to be the only cards that would work with the service, according to the WSJ. The NFC system is to be developed by VeriFone, a provider of credit card readers for businesses.