Google Buys Mobile Payments Startup

Google has given its payments system a boost with the acquisition of a startup that will let vendors take payments at the wave of a hand. The search giant has purchased a Zetawire, a little known Toronto-based startup that processes mobile credit card payments collected through a technology called near field communications (NFC), according to a report.

The 451 Group, a tech analysis firm, recently revealed that Google completed the acquisition of Zetawire back in August. It appears as though Google bought the company before it could launch its main NFC product. According to a patent filing, Zetawire’s technology supports mobile banking, advertising, credit cards, and mobile coupons.

Near field communications is a version of radio frequency identification (RFID) technology that is already used to collect payments by some credit card companies. Users with a NFC-equipped phone would simply wave their device over a receiver to make a payment. Similar systems are used regularly in places such as Japan and Finland, but have yet to see widespread use in the U.S.

Google has been pushing for the inclusion of NFC technology in mobile phones powered by its Android operating systems. CEO Eric Schmidt demoed the technology with a Samsung smartphone at the Web 2.0 Summit in November.

Google clearly intends to take the technology beyond payments, and has been experimenting with NFC stickers in Portland. The stickers are placed near local businesses. Users with NFC-equipped phones hold their devices near one of the stickers and receive information about that business, including customer reviews.

Visa, MasterCard, and Bank of America are also reportedly racing to see who will be the first to bring the technology to market.

Google’s Android team has helpfully provided a video explaining how NFC can be used with the Samsung Nexus S phone: