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Google is planning to hand shopkeepers thousands of NFC-capable terminals in New York and San Francisco, to encourage proximity payments using their Nexus S handset.

Bloomberg has been chatting to some of the merchants who've been offered the terminals, though it appears to suggest that Google is planning its own payment ecosystem. This isn't necessarily the case - Near Field Communications is a radio standard, not a payment system, and the Verifone terminals will support all the popular proximity-payment systems, even if they happen to be installed on the same phone.

Google won't comment on the story, but Bloomberg's sources talk of a service being launched within four months backed by thousands of terminals handed out by Google.

Earlier this month, Verifone told NFC World that all its new terminals will be supporting NFC, making the technology a standard feature along with the mag-stripe and chip readers. But just like magnetic stripe or chip readers, the technology isn't tied to a specific payment processor, and phones like the Nexus S are expected to play host to multiple payment applications.

So a user might download and install a Visa PayWave application, or an ISIS one, or even one from PayPal or Google Checkout, with the phone selecting the appropriate payment system based on what that merchant will accept and preferences configured by the user.

That's not to say that Google isn't developing an incarnation of Google Checkout for use in meat space, and one that can be installed on the Nexus S, but it's not Google's way to lock out competitors. If the Chocolate Factory really is handing out NFC terminals, then it is more likely an attempt to ensure the NFC boat is properly at sea before Apple tries to climb aboard. ®

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