Mastercard and Citigroup are teaming with Google to further Google's mobile payment ambitions using near-field communication technology on Android phones.
With the deal, Google is looking to boost its local advertising business and "offer retailers more data about their customers and help them target ads and discount offers to mobile-device users near their stores," according to a Wall Street Journal report.
This move is aimed at making paid search more attractive to advertisers, especially local advertisers, by demonstrating ROI in addition to analytics, a topic which Michael Boland wrote about in depth last month in "Mobile Payments: The Next Battleground for Google, Apple."
As Google battles for local ad dollars with the likes of Groupon, Facebook, and Yelp, Android payments will enable Google to demonstrate when ads targeted to certain groups of people directly resulted in an in-store purchase. "Google, by helping to facilitate transactions and redemptions of coupons and discounts, may also be able to gain insight into consumer-spending behavior," the WSJ article noted.
With NFC, consumers who have a Citigroup-issued credit card or MasterCard can enable an mobile payment app and wave their phone in front of an electronic reader when checking out at a store. Contact-less payments are made possible by VeriFone, which makes special readers for mobile NFC payments.
Android began offering NFC with Android 2.3. Google reportedly won't earn a cut of the transaction fees.
Google is also looking to get a jump on Apple, which is expected to introduce NFC in the iPhone 5 later this year.