Google unveils 'Google Wallet'

Google is unveiling a new age for payments through its electronic wallet for Android Phones at an event held at New York. It will be launching its long time plan of mobile payments which will be known as 'Google Wallet.' Users of Android phones equipped with an NFC chip will be able to use this new service. Initially the service will be made accessible to cities like New York, San Francisco, Los Angeles, Chicago and Washington, D.C.

This new method of payment will allow consumers to make store purchases and redeem coupons by waving smartphones at checkout counters. The service is expected to tap near-field communications technology and would allow users to pay for retail purchases by holding the devices up to a specialized reader at checkout counters. 

Near-field communications allows devices like mobile phones, to swap and exchange information wirelessly when they are near each other, about 4 inches. Consumer can use the NFC technology to pay for items by using their smartphones to send payments directly from their bank accounts to a store terminal.

Speculations were high that Google was partnering with MasterCard and Citigroup to allow the financial giants' customers to use their debit and credit cards to pay for purchase from their Android smartphones. It is to be noted that Google also paid for the installation of thousands of NFC short-range, wireless point-of-sale systems from VeriFone at stores in New York and San Francisco.

It is anticipated that around 40 million to 50 million NFC-equipped phones will be sold in 2011, according to a research firm Forrester. However initially only two phones will be available with NFC chips installed in United States and they are Google Nexus S and the Nokia C7 or Astound. Soon many more will join the league once the service will kick start.

Apart from Google many other companies are also keen to make utilization of the demand for mobile payments business. Microsoft is planning to include NFC technology in a future phone of Windows Phone 7. T-Mobile, AT&T, and Verizon have already formed a joint-venture payment system called Isis which is predicted to hit the market soon. However Apple's upcoming iPhone 4S and iPhone 5 are believed to be without NFC.

The only big challenge that lies ahead of these giants is to instill the confidence among its consumers about the security as mobile payments still scares people of losing their money and data. And there are some bad guys always watching, to take advantage of such new technology.