Google Inc (Mountain View CA) and four bank and telecommunications partners on Thursday unveiled "Google Wallet," taking U.S. shoppers a step closer to paying by waving their mobile phones at the checkout counter.
The Internet search company's system that lets people pay with phones instead of cards, hoping to win a race against major rivals including Visa, top U.S. banks and mobile network operators.
Google, Mastercard (Purchase, N.Y.), Citigroup (New York, N.Y.), First Data (Atlanta, Ga.) and Sprint (Overland Park, Kansas) will make the service available this summer to people in New York and San Francisco, Google and its partners said on Thursday. Sprint is the first carrier to launch the Google Wallet, and will deploy the service first on the Nexus S 4G smartphone.
According to its press release, VeriFone is also partnering with Google by providing “merchants with flexibility and easy migration to Google Wallet and the ability to leverage NFC to increase sales and customer loyalty through multi-application, interactive systems.”
Designed to work as an app on Android phones, Google Wallet uses MasterCard's "PayPass" technology, which lets shoppers tap cards for payment. Google has signed up retailers including Macy's Inc, American Eagle Outfitters Inc and Subway to blend the service with loyalty programs and discount offers.
Shoppers abroad, especially in Asia, can pay for things by waving their phones at check-out. In the United States, mobile wallets still face hurdles, but since last year, some large companies have raced to make the technology a reality.
Citigroup Mastercard holders with PayPass-enabled cards will get first crack at Google's service. The Internet giant also plans to sell a virtual prepaid card.
Visa Inc has tested a pay-by-phone system with several large banks, including Bank of America Corp and Wells Fargo & Co. The world's largest credit and debit card processing network has said it plans to make its mobile payments system commercially available this year.
(Reporting by Maria Aspan and Jennifer Saba. Editing by Robert MacMillan)