Google introduces mobile payments system Google Wallet

Google on Thursday introduced its mobile payments system Google Wallet, bundled with its coupon service Google Offers, planning to bring all parts of the retail experience together on smartphones.

According to Google's official blog, the search giant hopes to put tickets, credit cards, receipts, and coupons in Google Wallet, a mobile app using a technology called near field communication ( NFC).

NFC enables simple data to be transferred over a distance of 4 cm or less between two devices with NFC chips planted. The data include credit card information, ticket information and a coupon bar code.

The first phone that will be able to use Google Wallet is the Android-based Nexus S. It will make payments via MasterCard's PayPass system, which uses NFC technology. All Android phones will contain NFC chips in the future, said Google.

As for security, customers are required to set up a Google Wallet PIN which must be entered before making a purchase.

Google on Thursday also introduced Google Offers, a daily deal service that will be delivered to customers in an e-mail or to their smartphones. The service will compete directly with deal-of- the-day websites like Groupon, LivingSocial and Foursquare.

When customers pay through Google Wallet, they just need to wave their smartphones in front of an NFC-chip reader, which will redeem the coupon, charge the card and add loyalty points with the merchant to the phone. Receipts will be delivered to the phone.

Trials will begin this summer in New York, Portland and San Francisco with other cities to follow, Google said.

The first participating retailers will be Macy's, Subway, Walgreens, Toys R Us, Bloomingdale's, Guess and Noah's Bagels. The MasterCard PayPass system has over 300,000 merchant locations with NFC readers.

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