Google in major NFC alliance with MasterCard and Citigroup

28 Mar 2011

Internet giant Google is to press the start button on its integrated NFC (near field communications) technology within Android Gingerbread after revealing an alliance with MasterCard and Citigroup.

The move will enable consumers equipped with Android phones to make contactless card payments by simply waving their phones in front of an enabled till in stores.

Under the deal – which doesn’t include any transaction cut for Google – holders of Citigroup debit and credit cards will be able to pay for goods and services by using the mobile payment capabilities in the latest Android devices, such as the Samsung Nexus S.

The technology enables consumers to carry a virtual mobile wallet embedded as an app within their phone and allow them to decide whether to pay by cash, debit card or credit via their phone.

The deal also involves credit card reader giant VeriFone systems.

The NFC landscape

But what’s in it for Google? Quite simply, in a world where advertising and deals are merging and boosted by location-based capabilities, the advertising potential is enormous.

The new service is expected to debut at first in the US later this year.

Mobile operators, in particular, are eyeing the area with interest and view NFC as a natural marriage with the billing relationships they have fostered in recent years.

In Ireland, O2 launched its own-branded cash cards in collaboration with 3V in a move that could be considered a forerunner for eventual financial services for consumers from the mobile operator.

In November, three of the largest telecoms operators in the US – AT&T, Verizon Wireless and T-Mobile – created a new mobile payments venture called Isis, which will combine smartphones with NFC technology.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years