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Google Wallet is Google’s new service that promises to let your ditch your wallet, physical money and cards for an App on your smartphone. How does it work? Read on.

Google Wallet

This new service will allow users to store all their credit card info, as well as gift cards, offers, coupons and royalties on their cell phones. Google has just announced this service, along with Spring, Citi, MasterCard and First Data in New York city:

Today, we’ve joined with leaders in the industry to build the next generation of mobile commerce, With Citi, MasterCard, First Data and Sprint we’re building an open commerce ecosystem that for the first time will make it possible for you to pay with an NFC wallet and redeem consumer promotions all in one tap, while shopping offline.

Payment will be done either through a PayPass eligible Citi MasterCard or a Google prepaid card. Google Wallet will work using near-field communication (NFC) to secure payments within seconds by simply checking into any PayPass-enabled terminal at checkout.

The company is also concerned about security and has promised to create a unique PIN code which will be used to protect all the sensitive data, including credit card numbers, which will be encrypted and stored on a chip, known as the secure element, independent from the phone’s memory and only accessible through authorized programs.

There will also be daily deals, much like those found on sites like Groupon. Those deals will be available on Google Ads as well as check-ins inside stores.

This service will have a global reach. Google Market will be accepted at over 124,000 PayPass-enabled merchants nationally and more than 311,000 globally.

“MasterCard has pioneered mobile payments with our PayPass technology and we’re proud that it is at the heart of Google Wallet,” said Ed McLaughlin, chief emerging payments officer, MasterCard. “We’re excited to partner with these industry leaders today and committed to continuing to play a leadership role in the development of mobile payment technologies.”

Google is taking mobile payments one step forward, with a technology they call SingleTap. In short, it allows users to easily store gift cards and coupons right on the device. Redeeming gift cards will also be easy, and possible to do with a single tap. This puts an end to paper overload forever, at least in wallets. Retailers such as Macy’s, Toys"R"US and American Eagle Outfitters are participating in the program:

“Google Wallet allows us to harness the power of mobile technology to enhance our in-store shopping experience and helps bridge the gap between our online and in-store consumer interactions,” said Martine Reardon, executive vice-president of marketing and advertising, Macy’s. “Macy’s is always looking for cutting-edge technology that will deliver value and engage our customers in personal ways. Google Wallet delivers this unique interaction across channels.”

The service will first debut in test mode in New York City and San Francisco, where stores, Coca Cola vending machines and even taxis will be able to interact  with the technology.

Wow, are we ready to ditch our wallets yet?

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