Rumour: Google to launch NFC payment service

Near-Field Communications, or NFC, technology is set to be the next big thing - it's already in Google's Nexus S smartphone, and is tipped to appear in Apple's upcoming iPhone 5 - and a recent report suggests that adoption of the technology is to get a major boost.

While Google has already started doing its bit to encourage adoption of the technology at a consumer level, adding native support for NFC radios into Android 2.3 'Gingerbread' and forging ahead with its Samsung-manufactured NFC-equipped Nexus S, the advertising giant is reportedly also trying to push things along at the other end of the scale with the launch of its own NFC payment service.

According to a report on BusinessWeek, the company is expanding on its efforts to increase adoption of NFC technology among businesses - which it already encourages with NFC-equipped window tags as part of a trial programme it calls Hotpot - and may be looking to become an NFC payment provider, netting itself a bigger slice of the pie while at the same time allowing it to gather even more analytics on its users.

While as-yet unconfirmed by Google itself, the move makes sense: the use of NFC radios in the Nexus S at a time when the technology has yet to see widespread adoption proves that Google is hoping to push the technology forward, and the company already has experience as a payment processor thanks to the Google Checkout project.

With mobile payment transactions expected to reach an estimated $1.13 trillion world wide by 2014, and with around a third of those expected to be powered by Near-Field Communications technology, it's almost certain that Google will be looking into taking a more active role in the deployment of NFC payment systems - but will the customers follow?

There's certainly no denying that contactless payment technology is convenient: RFID-based systems are already widely deployed in the form of Oystercard, which sees thousands of commuters swiping their card daily, and Barclaycard credit cards. The idea of a version of the technology that operates from a range of around four inches - and which could almost certainly be boosted with high-gain antennas - raises the spectre of digital muggings, where attackers can remove money from your account simply by walking past you in the street.

Although an unlikely scenario, NFC payment systems - whether deployed by Google or by others - will have to ensure they project the appearance of strong security in order to convince customers to adopt the technology.

With Google's rumoured NFC system due to deploy later this year, according to two unnamed sources allegedly familiar with the project, 2011 could prove make or break for the technology as a method of payment.