Google was the first major company to push NFC (Near Field Communication) in to the mainstream. NFC is the technology that allows contact-less payment using a smartphone device to replace the plastic credit card. NFC has been widely adopted in Asia.
This morning the Wall Street Journal reported that the giant search company is teaming up with major financial institutions: MasterCard, VeriFone Systems and Citigroup to pursue the push for adoption of NFC to daily retail transactions, according to people familiar with the matter.
Smartphone equipped with this mode payment yields convenience to users, since it can replace their wallet. The smartphone is more capable than a plastic credit card to provide additional security (e.g. Biometric scanning can be added to ensure identity of the user), Financial institutions and Google can also collect a wealth of data in real-time including location for various purposes. Local business advertisement is one of the benefits, The planned payment system would allow Google to offer retailers more data about their customers and help them target ads and discount offers to mobile-device users near their stores.
NFC requires a special hardware chip install on the smartphone device. Google Nexus S, the company Android phone has such chip built-in. RIM Blackberry is also conducting some field experiments with a new battery door with embedded NFC chip. Apple next iPhone is also rumored to have this technology built-in. Retailers are asked to install a new NFC capable reader for their point-of sale.
As always, the adoption of NFC creates a new ecosystem that might rock the current systems. Wireless carriers might be wondering if they can ride along with the new technology or this will bypass their potential business revenues.