Google Wallet announced, Sprint's Nexus 4G will be the first phone to take advantage of it

Google announced its mobile payment service Google Wallet, which will go live at various retailers in New York and San Francisco over the summer, then more cities will follow.

The first NFC-equipped device to take advantage of it will be Sprint's Nexus S 4G, with more to come, or you can use a special NFC sticker on the back of your phone, similar to the Bling Tag. Google will subsidize merchants to upgrade their POS equipment for taking NFC payments.

For the mobile payment backend Google Wallet is partnering with MasterCard's PayPass system for payment processing, which works for some of its cards with embedded chip to wave it in front of a terminal and pay. Citigroup is providing the banking services behind the project, and as far as retailers go, Google Wallet will be available at such stalwarts as Macy's, American Eagle, Subway, and The Container Store, among others.

Google is not charging anything extra than the usual merchant fees MasterCard is charging for paying with a credit/debit card, but it hopes to make some cash out of it by pairing mobile payments with the so-called Google Offers, coupons and loyalty program. You can be at Macy's, for example, tap your phone at the Google Offers mark, and get today's coupon or special offers, then use them at checkout.

As far as security is concerned, Google clarifies that Google Wallet acts as a virtual credit card, you can call and deactivate it, if your phone is lost or stolen. Still, you have to enter a PIN password for the payment to take place, as if you are paying with a debit card entering your PIN code, plus if your phone goes missing there won't be anything to call MasterCard with anyway.

source: Google

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