Google Said Planning Mobile-Payment Service Debut

May 24, 2011, 12:38 PM EDT By Olga Kharif and Greg Bensinger

May 24 (Bloomberg) -- Google Inc. plans to unveil a mobile- payment service May 26 that will be available on phones from Sprint Nextel Corp., three people familiar with the matter said.

The service will let consumers with specially equipped phones that run on Google’s Android operating system pay for goods and redeem coupons with their handsets, said the people, who wouldn’t be identified because the plan isn’t public. The technology is available on the Android-powered Nexus S from Sprint, the third-largest U.S. wireless operator.

Google is rolling out so-called near-field-communication technology, which lets people pay at NFC-equipped cash registers with a flick of their phone, to boost revenue from mobile advertising and discounts. U.S. spending on mobile coupons may rise to $6.53 billion in 2014, up from $370 million last year, according to Borrell Associates Inc.

Sprint said last month it was working with a variety of handset makers and technology companies on NFC payment systems. Google plans to introduce the service in five cities -- New York, San Francisco, Los Angeles, Chicago and Washington, D.C. - - three people said in March.

Google is using hardware and software from companies including VeriFone Systems Inc. and ViVOtech Inc. to run the service, two people said at the time.

Nathan Tyler, a spokesman for Mountain View, California- based Google, and Jennifer Walsh Kiefer, a spokeswoman for Sprint, declined to comment. Google has sent out invitations for a press event in New York on May 26.

Apple Inc., whose iPhone competes with smartphones that run Google’s Android software, is planning a similar NFC payment system, Richard Doherty, director of consulting firm Envisioneering Group, said in January. Android is used by handset makers including Motorola Mobility Holdings Inc., Samsung Electronics Co. and HTC Corp.

Google’s mobile-payment service would also face competition from alternatives such as ISIS, a joint effort of AT&T Inc., Verizon Wireless and T-Mobile USA. ISIS plans to roll out its service in two cities, including Salt Lake City, in early 2012.

--Editors: Peter Elstrom, Tom Giles

To contact the reporters on this story: Olga Kharif in Portland, Oregon, at okharif@bloomberg.net; Greg Bensinger in New York, at gbensinger1@bloomberg.net.

To contact the editor responsible for this story: Tom Giles at tgiles@bloomberg.net; Peter Elstrom at pelstrom@bloomberg.net.

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