Google has unveiled its mobile payment service at an event in New York, and plans to roll out the service in the US this summer.
The Google Wallet app will initially be available on Google Nexus S devices, and will allow users to pay for purchases at 150,000 US stores with a single tap.
Initially, the application will let users pay for purchases using a Citigroup credit card or via a Google Pre Pay card, which can be topped up with any credit card.
Google will launch another service dubbed ‘Google Offers' simultaneously, which will send customers emails about offers based on their transactions.
Speaking at the event Stephanie Tilenius, Google's vice president of e-commerce, said that the firm is looking to "redefine commerce and payments".
Users will be able to pay for items, collect loyalty points and get a receipt for purchases on their device with just one tap, she said.
Google Wallet will also allow merchants to provide offers based on the location and transaction history of users.
The long term plan is to enable people to store items such as their driving licence and concert tickets on the Wallet app, Tilenius added.
Osama Bedier, vice president of payments at Google, demonstrated the app live on stage and noted that it will "change the way in which credit cards are offered".
During the setup process he touted the security features of the app. Users will be required to sync the app with a Google account and create a new pin before they are able to provision a credit card and start using the app, he said.
The Nexus S also features a PN65 chip, which is featured in electronic passports and credit cards to boost security.
Bedier confirmed that the service will be rolled out in New York and San Francisco initially, with participating outlets to include Macy's, Subway, American Eagle and Walgreens.
Fred Huet, managing director of Greenwich Consulting, noted that Google's announcement represents another step forward in the mobile payments race.
"Operators such as O2 and Orange are already gearing up, and with Google's power in the handset, OS and search space, it is just a matter of time before people are paying for their morning coffee with their phone," he said.
"[But] how long retailers take to deploy technology and a lack of NFC-enabled handsets could stand in the way of mobile payments taking off in the UK this year."
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