Google To Develop M-Wallet; Amex Launches M-payment Tool

Google is working on setting up a mobile payments system that will turn Android phones into electronic wallets, reports the Wall Street Journal. The new technology, which is in its early stages now, will let Android users wave their phones in front of card readers at the checkout counters of various merchant establishments to make payments (as opposed to manually swiping the card).

The new technology will allow Google to offer retailers more data about their customers, and in turn enable them to offer customized advertisements and discounts sent directly to handsets of users who may be in the vicinity of the stores, reports the Journal. Android phones are equipped with GPS, and if the user has her GPS turned on, Google can pinpoint the location of the phone to roughly about a few metres range.

'Tap and Pay' is an option several banks are testing. Citi, for instance  attempted a contact-less tap and pay mobile payment project in India in 2009. Citi piloted this service in Bangalore, based on a technology called Near Field Communications or NFC, which is a set of short-range wireless technologies, the same family of technology Google is believed to be working on, joining Citigroup and Mastercard.

In another development, American Express launched Serve on Monday, reports PC Magazine. Amex Serve will let users make the same mobile transactions, but without enlisting the help of NFC. Serve offers multiple payment options, including person-to-person (P2P) money transfers, mobile payments, in-store card payments and online transactions, as part of a single account, according to Amex. The company also says its payment service can be disruptive, though in not as many words. "We have big plans for tomorrow and plan to change and adapt to the way you really want to use and manage your money," reads a line from the Serve site. Amex will link NFC capabilities to its own platform.

By the end of 2011, an estimated one billion people around the world will be connected to the mobile web and 50% of all Americans will own a smartphone, according to a blog post by Google.