"Your phone will be your wallet. Just tap, pay, and save," said Stephanie Tilenius, Google's VP of Commerce, announcing the platform at the Google Partner event in New York.
'Google Wallet' is a free Android app that securely stores multiple credit cards, or a Google prepaid card linked to your credit card (one that Google provides). When opened on an NFC-enabled smartphone, you can tap your phone against a supported payment reader and the item you want to purchase is instantly charged to your credit card.
Field tests are already in place in New York and San Francisco, but when it launches commercially this summer Google Wallet will work on Sprint's Nexus S 4G, MasterCard credit cards issued by Citi, and at retailers equipped with Mastercard's PayPass terminals. The transactions will be processed by First Data, an Atlanta-based company.
Retailers who've signed up include Walgreens, Subway, Toys "R" Us, American Eagle Outfitters, and Macy's.
At the event Osama Bedier, a former PayPal exec and currently Google's VP of Payments, demonstrated the end-to-end consumer experience with a skit about buying denim shorts for his daughter.
First, Bedier opened the Google Wallet app on his Nexus S and agreed to the Terms and Conditions. He then attached his Google Wallet to a Google account, entered a PIN number to open the wallet, and filled out a form to link his Citi credit card account to the app.
Then Bedier stepped into American Eagle Outfitters store (use your imagination), where Beth McCormick, senior director of customer systems at AEO, joined the stage and handed him a pair of American Eagle's MIDI shorts. Bedier brought the shorts to a PayPass terminal, tapped his smartphone against it, signed his name, and "left" the store.
Bedier called this "Single Tap" but in reality, it's more of a tap-sign transaction.
Beyond the wallet, Tilenius also introduced Google Offers, which delivers daily, targeted, Groupon-like deals to the Google Wallet. Users can also store coupons they find independently.
"In the future you find an offer you want, you save it to your wallet, you click and pay. No more clipping and printing," Tilenius explained.
Later on Tilenius and Bedier emphasized the openness of the Google Wallet ecosystem, which is rather limited for now because it only works on one phone.
"We'll partner with anyone, depending if they open up their phones for NFC capability," she said, naming Apple, RIM, and Microsoft.
"We think we've created a compelling reason for NFC to be in the market," Bedier added. "Now it's a matter of getting as many partners. This is about creating open standards, a compelling model, and asking folks to join.