Smartphones are about to take a major swipe at plastic.
Internet search giant Google Inc. has unveiled an application that would enable consumers to use their Android smartphones to pay for products at hundreds of thousands of retail stores in the U.S.
Google Wallet, set to launch this summer, is the company's entry into the burgeoning and increasingly competitive business of turning mobile devices into digital credit cards.
Big cellphone makers, including Nokia Corp., Research in Motion Ltd. and reportedly Apple Inc., are rushing to roll out new handsets that will allow consumers to pay for groceries, subway passes and restaurant meals by simply waving their phones over a digital sensor.
Phone manufacturers and wireless carriers are jumping on the technology because it may enable them to cut in on the fast-growing world of local offers — a business that is well suited for smartphones because it lets marketers and advertisers send digital coupons to users based on where they are shopping or eating.
Google said that by 2014, it expects purchases made on mobile phones to quadruple, to nearly $630 billion. Visa and MasterCard process about $6 trillion worth of credit card transactions annually.
The new smartphones will have near-field communication, or NFC — the radio technology that allows phones to talk to credit card terminals wirelessly.
Google said its Wallet system would work at more than 120,000 MasterCard "PayPass" locations around the U.S. The system, developed with payment processor First Data Corp. and payment-terminal maker VeriFone Systems Inc., will initially be rolled out at stores including Subway, Macy's, Walgreens, American Eagle and Toys "R" Us.