Google Unveils Google Wallet

Google has joined the race to offer consumers the chance to leave their wallet at home and instead use their mobile phone to make payments.

At a joint press conference at its New York offices, Google, Citibank and Mastercard on Thursday unveiled plans to turn the company's Android mobile handset phone into Google Wallet, complete with an app that lets users make "wave and pay" purchases in stores.

Instead of swiping a card, customers will be able to wave their phone in front of a reader to make the payment. Initially, only high-end Citibank customers will be able to use the adapted phones, which will be linked directly to their credit or debit cards.

Trials start immediately and Google predicts the service will officially launch this summer in San Francisco and New York City, followed by a roll-out nationwide.

Google said its open platform will enable it to be used on any device or card, and hopes to get more partners on board.

Stephanie Tilenius, Google's vice-president of commerce, said: "We're about to embark on a new era of commerce where we bring online and offline together. We believe the shopping experience has not yet been transformed by technology or by magical experiences. Now, your phone can be your wallet."

Google's move is relatively late. Rival telecoms companies have been trialling mobile payment technology in Europe for some time. The industry hopes mobile payments will revolutionise the high street in the next three years.

Last week in the UK, Orange announced it was offering its mobile customers the chance to make contactless payments from a pre-loaded Barclaycard embedded in a special Samsung handset.

O2 is expected to launch a more sophisticated mobile payments service in the UK in the second half of the year "well in time for Christmas". The firm is expected to offer a genuine digital wallet, allowing users to embed credit and debit cards in their handset, and allow payments between phone users.

Yesterday the Payments Council, which represents the UK's banks and card providers, announced it was undertaking a major new project into how to make paying by mobile "as easy, efficient and secure as any other way to pay".

Predicting that the mobile phone would soon replace the wallet for many mobile users, it said the project would focus on the ability of mobile users to transferring money to businesses or other mobile users via an app or attached to a text.

Gary Hocking, the Payments Council's acting chief executive, said: "The introduction of mobile payments will offer more choice to customers, simplifying how we can make a financial transaction and increasing flexibility in our everyday lives."