Google plans payment system that turns smartphones into credit cards

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Techno-phone: Google has teamed up with Citigroup and Mastercard to develop to mobile payment system specifically for the Android phoneIt brings a whole new meaning to the term pay phone... and you won't need a pocket full of change to make it work.But Google has masterminded a mobile phone that doubles as a wallet.Instead holding up checkout queues as customers rifle through their purses to find the right card, they will simply swipe the phone past an electronic reader to pay.And experts claim it is a safer method of payment than magnetic strip credit cards.
The web giant has teamed up with Citigroup and Mastercard to develop to mobile payment system specifically for the Android phone.
They have also consulted VeriFone Systems which makes credit card readers for cash registers.Doug Bergeron, VeriFone's chief executive, told the Wall Street Journal: 'A phone is a lot smarter than a card. It opens the door to a rich experience at the point of sale that retailers really covet.'He declined to comment on his company's relationship with Google.The phone will also store shopping habits and trends so that retailers and businesses can more efficiently target consumers with discounts and advertisements.

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Google is not expected to get a cut of the transaction fees, the paper said. Experts also claim it is safer than the traditional credit card.

Future? Instead holding up checkout queues as customers rifle through their purses to find the right card, they will simply swipe the phone past an electronic reader to pay'Because it&! #39;s co ntact-less there's a perception people can grab it from thin air, but it's actually a more sophisticated technology than credit cards with a magnetic stripe, making it more difficult to steal a consumer's payment information,' said Nick Holland, a mobile-transactions analyst at Yankee Group.Initially, holders of Citigroup-issued debit and credit cards would be allowed to pay for purchases by activating a mobile payment application developed for one current model and many coming models of Android phones, the paper said. Google, Citigroup and Mastercard could not immediately be reached for comment by Reuters outside regular U.S. business hours.