September 15, 2011, 8:41 PM —
MasterCard on Thursday gave a sneak peek into the near future of mobile payment systems and said that the Google Wallet application is within weeks of being rolled out commercially.
Google Wallet, announced in May, lets mobile phone users pay for purchases in stores by tapping their phones against point-of-sale terminals. At the tail end of a media and analyst day in New York, MasterCard demonstrated the application as well as other, future mobile payments systems.
Initially, Google Wallet will work only on Nexus S phones, made by Samsung, on the Sprint network. Nexus S phones now on the market incorporate Near Field Communication (NFC) technology on an embedded chip, which allows for payment information to be transmitted via the tapping technique.
Google Wallet will work on PayPass terminals already deployed in stores, though some of the terminals will need an upgrade to work with the applications, according to officials at the demonstration. In the U.S., there are about 150,000 retail locations equipped with PayPass terminals, according to Kathleen Reilly, vice president and senior business leader at MasterCard, who said the Google Wallet application will be rolled out "within weeks."
Up to now, the PayPass terminals have worked with NFC chips embedded in cards or special stickers placed on the outside of mobile devices. However, chips embedded in mobile phones offer big advantages, according to Mario Shiliaski, senior vice president of Innovative Platforms.
"A big advantage is that the chips are embedded in secure elements in the hardware, and if they are compromised they are designed to self-destruct," Shiliaski said.
In addition, there will be a range of complementary applications for the technology that users will be able to download, Shiliaski noted. Google Wallets will initially offer the ability to store electronic coupons that can be redeemed at retail outlets, he said. Later this year, MasterCard's inControl will be available for download, he added. InControl is designed to let parents or employers establish parameters for when, where and how their cards are used. Users will get text messages, for example, when certain limits are met.
Major retailers including Macy's, Walgreens, Subway, Noah's Bagels, American Eagle, Bloomingdale's, Peet's Coffee and Toys 'R' Us have signed up to work with Google Wallet.