We’ve been aware of Google’s (GOOG) work to bring a new mobile technology into its Android operating system for a few months now, but reports are circulating that say the company is about to announce its whole near-field communication platform this week.
If you’re not up on your tech lingo, near-field communication is a type of technology that allows smartphones to send out limited signals and interact with other technology around them. The classic example is advertising: say you walk past a poster or a storefront, and on your smartphone, you receive a special offer. A small device in the area caught wind of your phone and the two things exchanged information.
Ads are one area that NFC technology has been mentioned, but the real push is in turning your smartphone into a credit card, or more aptly, into a digital wallet. Google is expected to announce a whole NFC arrangement that will allow Android device owners to store all kinds of information in their mobile devices and use them to pay for transactions in brick-and-mortar stores when they go out. All a smartphone owner would need to do is tap a phone against or wave it near a payment terminal, just like the ones that are used to scan credit and debit cards now, and the phone and terminal would work together to complete the transaction instantly.
According to a story from the Wall Street Journal, Google will be unveiling the details of its NFC program Thursday (May 26) at an even in New York City. Here’s a quote from that story:
“The program will launch first in New York, San Francisco, and potentially other locations, followed by a broader rollout, said a person familiar with the matter. Participating retailers include Macy's Inc., American Eagle Outfitters Inc. and the Subway fast-food chain, said a person familiar with the matter. Retailers that participate in the program will have upgraded terminals at the point of sale that can read the mobile devices and provide special offers.”
Google already has a lot of companies interested in NFC, so when it eventually does announce its platform, it should be pretty complete. MasterCard (MA) is on board and even conducted an NFC survey recently that found that 60 percent of smartphone owners would be comfortable using their phone to pay during transactions. VeriFone (PAY), the maker of those blue credit and debit card scanning terminals most of us interact with every day, also is working with Google and adding NFC technology to its new terminals.
The plan, according to the WSJ story, isn’t for Google to get a cut of these transactions for the use of the technology. Instead, Google wants the information NFC can provide for advertising. Using NFC for payments allows Google to compile a lot of data about shopping habits; who’s buying what, how much and how often, as well as finding which deals appeal to which customers and are most effective. The idea is that people using NFC to purchase things can then be catered to by businesses, providing them coupons they’ll use and tailoring sales to be highly effective.
The NFC digital wallet will also include things like loyalty cards, rewarding customers for patronizing businesses while giving them a leg up on their competition with the info they can get from Google. That’s actually fairly similar to a new service being rolled out by Square, another mobile payments company that allows businesses to turn tablets and smartphones into credit card readers for transactions. Square hopes to replace cash registers with iPads, making paying easier on buyers while gathering all kinds of useful information for sellers.
NFC won’t be just limited to transactions and advertising, but those areas are probably where it will be biggest. Going by the Wall Street Journal’s report, if Google really does announce its NFC platform Thursday, it sounds like the company is ready to roll it out to the public pretty much immediately.