We already know that Google has been working on a Near Field Communications (NFC) payment system. Recently, we saw the launch of Google’s new smartphone, the Google Nexus S, which features NFC built-in.
Now, reports are indicating that Google is collaborating with MasterCard and Citigroup on NFC payments. According to the report, the payment system would allow customers who use Citigroup debit cards to pay for things via NFC with an NFC-enabled mobile application on their smartphone.
The report also states that the deal includes VeriFone Systems Inc., a company that manufactures credit card readers. They are apparently working on a device that would be able to communicate with a user’s NFC-enabled smartphone at the point of sale.
How NFC Payments Work
NFC, or Near Field Communication, is a set of communication protocols that enable two electronic devices to communicate when they are within close proximity, typically less than 4 cm. This technology is commonly used for contactless payment systems, similar to those used in credit cards and electronic ticket smartcards. An NFC-enabled smartphone can act as a payment card, allowing users to make transactions by simply tapping their phone on an NFC reader.
The integration of NFC technology into smartphones like the Google Nexus S represents a significant step forward in mobile payment systems. By partnering with financial giants like MasterCard and Citigroup, Google aims to streamline the payment process, making it more convenient and secure for users.
Potential Impact on the Market
The collaboration between Google, MasterCard, and Citigroup could potentially revolutionize the way we make payments. With the increasing adoption of smartphones, the convenience of using a mobile device for payments is becoming more appealing. This system could reduce the need for physical wallets, as users would only need their smartphones to make purchases.
Moreover, the involvement of VeriFone Systems Inc. suggests that the necessary infrastructure for NFC payments is being developed. VeriFone’s expertise in creating credit card readers means that they are well-positioned to develop NFC-compatible devices that can be used at various points of sale. This could lead to widespread adoption of NFC payment systems in retail stores, restaurants, and other businesses.
We have also heard previously that Apple may be working on a new NFC payment system, something which we were expecting to see in this year’s iPhone 5. Although recent reports have indicated that we may have to wait until 2012 to see the first NFC-enabled iPhone, the competition between tech giants like Google and Apple could drive innovation and lead to more advanced and user-friendly payment solutions.
In addition to convenience, NFC payments offer enhanced security features. Traditional magnetic stripe cards can be easily cloned, but NFC transactions use encryption and dynamic data, making them more secure. Furthermore, smartphones can incorporate additional security measures such as biometric authentication (fingerprint or facial recognition) to ensure that only the authorized user can make payments.
As the technology continues to evolve, we can expect to see more applications of NFC beyond just payments. For example, NFC can be used for access control (e.g., unlocking doors), public transportation (e.g., tapping your phone to pay for a bus ride), and information sharing (e.g., exchanging contact information by tapping phones together).
The collaboration between Google, MasterCard, and Citigroup on NFC payments represents a significant advancement in mobile payment technology. With the support of companies like VeriFone Systems Inc., the necessary infrastructure is being developed to make NFC payments a reality. As more consumers and businesses adopt this technology, we can expect to see a shift towards more convenient, secure, and versatile payment solutions.
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