It finally happened: Late last week Google announced it was rolling out “Google Wallet,” a payment system that works with your phone. Here’s a cheat sheet to understanding this new tech — and how it will affect your shopping trips.
What it is: Embedded in your phone, a NFC (near-field communication) chip will allow you to make purchases by waving or tapping your phone on a special reader at registers. Instead of swiping a credit card or handing over cash, all you have to do is pull out your phone — kind of like E-ZPass. In the states, companies like Starbucks have already begun exploring mobile payments, to much success; RIM, PayPal and Apple are also working on wallet phone technology.
How it works: First, you must have a phone with a NFC chip. The Nexus S 4G from Sprint (pictured) will be the first phone Google Wallet will operate on but more will undoubtably follow (and Google hopes that its Wallet app will work on multiple platforms). Second, you have to download the free app. Third, you must have a Citibank Mastercard, a prepaid Google card or a gift card from a participating merchant. Your accounts are synced with the secure chip on the card, so you can manage them digitally. Fourth, at launch you’ll only be able to use Google Wallet at a few retailers–among them American Eagle Outfitters, Bloomingdale’s, Guess, The Container Store, Macy’s, Jamba Juice, Subway, Walgreens and Toys ‘R’ Us. Most will have the icons at left posted near the register to indicate that they’re Google Wallet-friendly.
Why would you want to use Google Wallet? According to the Washington Post, Google “envisions the cellphone to act as a personal financial hub for coupons, merchant loyalty points, payments and receipts.” So in theory, the service could make it easier and more convenient for you to track payments, manage your finances and take advantage of deals. And in an age where we can transfer thousands of dollars online without visiting a bank and filling out a slip, buy and read entire books without ever physically touching them, and get most of our bills delivered to our email in-box, paper receipts do seem antiquated. Google is betting big on the mobile wallet–in the next three years, the company predicts that $630 billion will be done in sales via mobile payments.