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Google readies 2011 pay-by-wave for Nexus S wallet chip

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Google is planning to launch an NFC-based pay-by-wave system, quite possibly this year, according to anonymous sources who talked to Bloomberg about the chocolate-factory's plans.

Not that the sources revealed much in the way of detail, only that Google is developing support for payments to be made in physical stores with a wave of the phone, and is running to a schedule that could see a commercial service launched this year, but who would run that service and what devices would be supported are the really important questions that remain unanswered.

Bloomberg quotes two sources, which has become traditional when one wishes an unfounded rumour to be taken seriously, but it's hardly controversial to suggest that Google is planning a proximity-payment system based on Near Field Communications – all the evidence points in that direction. The company won't say who holds the keys to the secure element embedded in the Nexus S, but it's hard to imagine Samsung would be allowed to retain such an important property, which leaves Google in control.

NFC transactions don't require a secure element – Bling Nation is happily running a payment system that uses a passive sticker that passes a customer number to the in-store reader with limited-but-generally-good-enough security – but the secure element makes transactions much more secure as well as providing space for alternative payment applications – so a Visa card can be added, or a Tesco loyalty card installed.

The owner of the secure element controls what can be installed and by whom. The Nexus S supports a secure element on the SIM card, under the control of the network operator, but it also has an embedded secure element (almost certainly) under the control of Google, which is where we would expect to see a physical incarnation of Google Checkout.

Such an application could be installed in other secure elements, on other phones, and Google would no doubt allow Visa and Mastercard applications as an optional download, but coming pre-installed is a significant advantage.

The search giant obviously has more plans for the NFC functionality of the Nexus S, despite the limited API in the initial release (which can only read and write tags, with no secure-element communications at all). The few hundred Hotpot stickers so far sent out are nothing compared to the 100,000 QR Codes that Google sent out as part of its 2009 attempt to get physical. Google payments are coming, but even Google will have to work hard before customers let the search engine manage their wallets. ®

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