Google's Mobile Payments Service to Launch in Summer, Dubbed Google Wallet

As expected, Google unveiled its mobile payments service on Thursday. Google Wallet will launch in trials this summer in New York, Portland, and San Francisco, with other cities to follow.

Google Wallet requires an NFC-equipped smartphone, and the trials will begin using Sprint's Nexus S 4G. If for no other reason than that the phone is CDMA and WiMax, that means the service will be U.S. only for now (but a number of Google services, such as Google Voice, are that way too). The company hopes that by 2014, 50 percent of smartphones will be NFC-capable.

Google Wallet will allow users to wave their smartphone in front of an NFC-chip reader to pay. The service will piggyback off of MasterCard's already existing PayPass system, but other partners include the aforementioned Sprint, Citi, and First Bank. By using PayPass to start, Google Wallet gets 300,000 locations to start with.

To use any credit card in your wallet, you'll need to enter your PIN each time you want to pay. Naturally, we'd be interested in how long that PIN will be, but that detail isn't available yet. We're assuming it might be as short as 4 digits, as most ATMs are, which isn't really that secure.

In addition, Google Wallet will sync with Google Offers, Google's Groupon / Living Social competitor. Whenever you buy or save a Google Offer, it will automatically sync to your Google Wallet, so that your offers are always with you.

Google will also be getting into the prepaid card market. It will offer prepaid rechargeable Google Mastercards. As an incentive, when you sign up for a Google MasterCard, the company will deposit $10.00, for free, into your prepaid account.

Finally, Google said it would partner with everyone, which includes iPhone, RIM, and Microsoft. They didn't mention HP, but that's probably another possibility. While the OEMs will likely add the chips, will the platform makers cooperate?

After all, NFC in iOS and iDevices has been bandied about for some time. It's not expected in the next-gen iPhone any longer, which for Google is a plus. The more Google Wallet adoption there is before an Apple competing service launches, the better for Google's own plans.