In a previous story, here, we shared the NFC (Near Field Communication) chip technology that will allow future smartphones to communicate directly with other devices to impart information instantaneously. This technology's primary focus will be auto-payment systems in retail zones, i.e. you swipe your phone in front of a reader device at a coffee shop, and you instantly pay your bill and receive a digital receipt on your phone. Shortly after that, we also shared with you, here, that the NFC chip reported in the Nexus S smartphone did not work that way because it was only a one-way device, akin to a bar-code reader. Now, because of new information released by Google, it seems that our original story turned out to be more accurate. Apparently, the NFC chip's hardware in the Nexus S is capable of using the full potential of the NFC technology, but it has not yet been fully implemented in the software. Furthermore, Google plans to unleash the potential of this technology in a big way for future phones as well.

According to a report from Businessweek, Google is hard at work developing a system that can unlock the potential in the NFC chip and allow these contactless mobile payments with your phone. A quote from the Businessweek article shares just a few applications of this technology , Quote:
A single NFC chip on a mobile phone would hold a consumer's financial account information, gift cards, store loyalty cards, and coupon subscriptions, say the people familiar with Google's plans. Users may also be able to make online purchases from their phones. By scanning a movie poster, for instance, a consumer might read reviews and use the Google service to purchase tickets.
Additionally, Google is in a spectacular position at the beginning of this burgeoning market because so many users already use and are familiar with the Android OS. Additionally, Google recently acquired or invested heavily in two start-up companies in the mobile-payment system market. One is called Zetawire, a Canadian startup with a patent on a way to combine a phone-based wallet with a reward-and-loyalty system. The other is Corduro, a closely held developer of mobile-payment solutions in Southlake, Tex.

Industry analysts from IE Research predict that NFC may account for a third of the $1.13 trillion in global mobile-payment transactions projected for 2014. It makes sense that Google would want to take Android into this market as it is tailor made to spear-head it, but he won't be without competition as Apple and Visa are working on their own plans to get in this game. Even Verizon, AT&T, and T-Mobile have joined forces with the "ISIS" initiative to bring forth the same technology. It will be interesting to see how this "race" turns out. I'm betting on 'Andy', and 2011 is shaping up to be one incredible year!

by dgstorm