Reports: Google to announce smartphones will replace credit cards

If one thought that Google would take a minute’s rest after yet another highly successful I/O conference earlier this month where a slew of new Google products and developments – most notably Google Music – were announced and released, think again.

According to “a source familiar with the matter”, Google is expected to launch what just may be its most groundbreaking innovation yet – smartphones that we’ll use like credit and debit cards.

According to these sources, on Thursday, in a New York press conference the California-based internet giant has called to see its “latest innovations” — but will not divulge what this means when asked; Google in conjunction with major financial institutions who have partnered with Google in this project will announce the project.

According to the source, the mobile payment system will take advantage of near-field communication (NFC) chips in smartphones. NFC chips provide secure wireless two-way communication between mobile phones and reception devices, such as other mobile phones, payment terminals or identification readers.

Essentially, with taps, waves or swipes of your smartphone at checkout points in stores, a financial transaction will be completed.

In December last year the first Android-powered phone with NFC capability, the “Nexus-S” – built by Samsung — was released. At the time of the release, Google’s Chief Executive, Eric Schmidt, was quoted as saying that he expected tap-and-pay mobile technology to “eventually replace credit cards”.

This possible announcement by Google would possibly work with Isis, the joint venture between the US mobile phone service providers AT&T, T-Mobile USA and Verizon Wireless which is also a NFC venture to make paying by mobile the way of the future. However, if so, when this project by Google would probably go live much later, as Isis, which was announced in late 2010 only announced that its pilot would be going live in early to mid-2012.

If these reports prove to be true, Google would be the first smartphone company to announce that it would be utilising NFC technology. However other smartphone companies have been reported to be taking steps toward using the technology as well.

Nokia had said in June of last year — prior to its decision to work with Microsoft — that it would be providing NFC-ready Symbian phones in the market by this year. There have also been rumours — for a while — that Apple was also looking to develop NFC capability for iPhones.

Despite whether these reports prove to be true, with forecasts pointing to one in every six mobile users worldwide having NFC-enabled phones by 2014, this is certainly where the future lies. The question, however still remains, will customers be willing to adopt this technology?