The unique feature of Google’s latest smartphone OS is that it can use Near Field Communication technology, which enables short-range secure wireless data transfer between compatible devices.
Although Google’s Android 2.3 Gingerbread OS can so far only read information associated with RFID tags, payment and other capabilities will be made possible soon.
Mobile payment transactions are set to amount to more than $1 trillion by 2014, according to IE Market Research, and Google will push for the implementation and use of NFC over the coming year. ISuppli, a consulting firm in California, says that global shipments of NFC phones will rise to 220 million units in 2014, from about 53 million units in 2010.
Verizon Wireless, AT&T, T-Mobile, Apple and Visa have also said they will support Near Field Communication. Visa has already approved In2Pay MicroSD mobile payment solution from DeviceFidelity which is compatible with some Blackberry phones, Apple iPhone and Samsung Vibrant Galaxy S. And Apple last year hired Benjamin Vigier, an NFC expert and patented a mobile payment system based on this technology. Research In Motion also did just that.
Other firms that will have a presence in mobile payments are PayPal, MasterCard, Bank of America, etc. eBay too might launch its own NFC service in 2011 and is looking to partner with companies like Google, the senior director of PayPal Mobile said to Businessweek. PayPal is a subsidiary of eBay.
An NFC-enabled smartphone can perform a financial transaction just by being waved at a cash register that is not more than 4 inches away from the phone. The smartphone will be able to send and receive data with the cash register, so it might tell the register just who bought what and when and how much the item costs, etc. Eric Schmidt, the chief executive of Google said at the Web 2.0 Summit in November 2010 that NFC will eventually replace credit cards altogether.
Google, eBay and Visa are expected to start offering NFC services by mid-2011. Many companies subscribing to this technology will mean that it will spread fast among retailers who would need to install the necessary hardware at their shops. Two NFC-enabled smartphones can also send and receive money from one another.
The way this technology will work is that an NFC chip will be installed in your smartphone with information about your financial account, store loyalty cards, discount coupons, etc. Movie posters will have RFID tags, and an NFC enabled smartphone will be able to scan the tag to retrieve reviews of the film and buy tickets for it online.