Google is reportedly partnering with MasterCard and Citigroup on NFC payment technology, using VeriFone NFC-enabled payment terminals to turn Android handsets into electronic wallets. According to the WSJ's sources, those with Citigroup-issued debit and credit cards would be able to use a new Android app - initially for the Nexus S, but then for subsequent NFC-equipped phones - rather than their physical cards when the service launches later in 2011.
According to the sources, Google would not get a cut of any transaction fees, but instead gain access to an increasing amount of purchaser data. That would allow for more focused advertising, along with Google-powered coupons and services, together with retailers having better insight into the shopping habits of their customers.
Walmart has apparently confirmed ongoing talks with Google, where the NFC payment system was discussed, but claims they were "very preliminary discussions" with no invitation to trial the service. Google has previously been tipped as readying NFC experiments in New York City and San Francisco.