Google Said to Be Working on Payments System Based on NFC

It shouldn't really be much of a surprise that Google is interested in mobile payments, its recent moves along with everything else that's happening in the mobile space make it a given. And now a first round of rumors is 'confirming' that Google is indeed thinking about a mobile payments solution and that NFC (near field communication) technology is at the heart of it.

With the rise of smartphones and the ubiquity of the mobile web, it is only a matter of time until mobile payments become a reality.

The promise of paying with your phone rather than a credit card has been around for years, and it has been a reality in Japan for a while now.

But no technology has managed to get any traction in the rest of the world. In 2011, the stars seem to be aligning just right and Google is betting on NFC as the technology that finally makes this possible.

Bloomberg is citing a couple of people close to Google which say that the company is working on a mobile payments system which is planned to launch this year.

Incidentally, the recent Google Nexus S has a NFC chip built in, the first Android device to ship with such a feature. It's also the only one running Android 2.3 which adds support for some NFC features.

Google is by no means the only one working on NFC payments and the technology is expected to be built into millions of phones this year.

But the real test is in getting retailers, businesses and especially customers actually using the technology and any of the payment systems built around it.

Google's experience with payments hasn't been the best. Google Checkout has been around for years as a competitor to PayPal but it hasn't managed to get much traction.

The fact that it's built into the Android Marketplace served as a disadvantage to the Android app market rather than make Checkout more commonplace.

Still, Google is in a great position to make mobile payments work. Android is set to become the most popular smartphone platform, while Google has been investing heavily in local services and the small business market.