Google Wallet puts NFC payment ability on Android devices, offers free readers

Google Wallet announced that they will partner with MasterCard, Citi Bank, First Data, Sprint and more for use of the NFC chip which allows users to make mobile payments at participating retailers. The first mobile phone that had used this technology was the Nexus S, which has a special chip inside to operate the payment process.

All you need to do is download the Google Wallet application to a NFC-enabled Android device and match it with a regular credit card or the Google prepaid virtual card.  All a user has to do is shop at a store that accepts MasterCard PayPass and then wave the phone in front of the reader at checkout. Whatever you are charging will be added to your credit card even without a network connection or a signal.

Google also brought out Google Offers, which is similar to Groupon. Google Offers give user deals on products and services at companies both on and offline. The Google Wallet application will automatically download these offers and can also store customer’s info for their store loyalty cards and receipts from the stores customers shop at that are participating.

Any store that has a PayPass reader can support the Google Wallet payments. Google says that more than 120,000 of these PayPass readers exist in the U.S. alone. Plus, in an effort to support the adoption of the new payment process, Google and First Data are giving a free reader and $100 worth of processing to stores that join in the Google Wallet list.  Stores are charged the same as for regular merchant credit card processing fees, but Google doesn’t make anything extra over that amount.

Too bad for the developers of Android, but the hardware and the secure payment APIs are only open to allowed applications. All payment credentials are located on a chip contained inside the Nexus S 4G called a Secure Element. This chip is separate from the main software of the phone and its hardware. Only programs that are allowed to access the Secure Element chip, such as those in Google Wallet, can make a transaction.

Even so, Google says it is an open commerce ecosystem and will be open in the following ways:

Tags Android devices Google MasterCard