Google, makers of the popular Android smartphone operating system, will soon team with both MasterCard and Citigroup to begin implementing a system that will allow users to load their payment information onto their mobile device, according to a report from the Wall Street Journal. In addition to making it easier for consumers to deal with their credit card debt – rather than using traditional cards and statements – the system would also be incentivized for businesses that opt to take part.
Google would allow companies that install the system for processing credit card transactions to gain more information about the customers that use it, allowing them to specifically target those people with special advertisements based on their purchase history, the report said. Further, it would help users by offering discounts to participating businesses based on the same data.
"A phone is a lot smarter than a card," Doug Bergeron, VeriFone's chief executive, told the newspaper. "It opens the door to a rich experience at the point of sale that retailers really covet."
Currently, the plans indicate the mobile payment system would only be available to consumers whose credit card debt or debit accounts are controlled by Citi, the report said. The Internet giant only has one type of phone available at present that would allow for such purchases to be made, but that will almost certainly change in the future regardless of whether the program proves successful in early test runs.
Recent reports suggest that the contactless mobile phone payment market is fertile ground for expansion, the report said. A Federal Reserve Board study found there are about 70 million contactless devices currently circulating in the U.S. – including both credit and debit cards – but only 150,000 readers.
However, this type of mobile wallet, which would not only allow consumers to make purchases but also get a better handle on their credit card debt and spending – is seen as the next frontier for mobile carriers, banks and consumers alike. The industry is expected to grow to be worth tens of billions of dollars within the next five years.