Google is reported to be testing NFC-based mobile payments on payment terminals made by VeriFone in San Francisco and New York this year. Meanwhile, Apple is reportedly backing off of NFC due to the lack of cohesion around a single standard.

Google is reported to be testing mobile payments at stores in New York and San Francisco, the company's latest bid to improve the user experience on Android smartphones. Bloomberg reported Mar. 15 that the search engine will pay to have thousands of cash registers from VeriFone Systems installed at various businesses.

The VeriFone sales terminals would accept payments from Android smartphones fitted with chips and software based on NFC (near field communication), the short-range wireless technology used to enable communication between sensors brought within close proximity of each other.

Another mobile payments firm called Vivotech will also play a role in the tests, says Bloomberg. The tests are expected to expand to Los Angeles, Chicago, and Washington, D.C., according to the story.

The project, which Google declined to confirm, hardly comes out of nowhere. The Android 2.3 "Gingerbread" build released in December added NFC support, potentially letting consumers tap their NFC-enabled phones against objects and machines with NFC sensors to enable wireless data exchange, including the payment of goods in stores. 

Google in December launched the Samsung Nexus S smartphone (pictured), the first phone based on Android 2.3, and the first Android phone with native NFC support. Google began testing NFC on the Nexus S in December in Portland, Ore., but reading was limited to posters and signs. One month later, a job posting for an NFC specialist popped up on Google's careers webpage.

Now, Google could test fly NFC on Gingerbread handsets within the next four months, according to Bloomberg. Verifone and Google declined to comment on the speculation.

Verifone offers several NFC-ready mobile payment terminals including the VX Evolution and QX1000 product lines. Previous Verifone terminals, such as the MX870 (pictured at left), have run on embedded Linux.

It was unclear what role Vivotech would play in the NFC testing project. In Feb. 2010, the company announced a Linux-based Vivopay 8100 mobile payments device (pictured at right). The Vivopay 8100 offers a traditional pinpad and mag-stripe reader, but also supports contactless payments via NFC-enabled mobile phones, with features such as coupon redemption and discount vouchers.

Frictionless Holy Grail

It's easy to grok why the search engine would want its users leveraging NFC on Android handsets. Such mobile payments are sort of a frictionless Holy Grail, allowing consumers to use their phones instead of lugging around credit cards in wallets.

NFC capabilities provide a compelling new opportunity for developers, who could charge for apps that enabled wireless payments from smartphones in stores. Good apps will bring in more end users, who will in turn be served more ads on Google's ad network.

While slow to materialize in the U.S., the market for mobile payments using NFC-related technologies is huge in Japan and in parts of Europe. However, they use slightly different, mostly incompatible contactless standards. For this reason, among others, stores have been unwilling to implement NFC-enabled computer systems.

Despite these challenges, analysts expect the NFC-based mobile payment market to boom to multi-billion-dollar figures over the next few years, propelled by the AT&T and Verizon Wireless-backed ISIS platform.

Apple rethinks NFC

Apple was rumored to be prepping the iPhone 5 to include NFC. However, a Mar. 14 report from The Independent says that the company is holding off  because of the lack of cohesion around a single industry standard.

According to the story, however, Apple is rumored to be working on its own NFC proposition, which would link payments through iTunes. The technology may appear on an Apple iPhone model as early as next year, says The Independent. Meanwhile, Research in Motion and Nokia are also said to be working hard on building NFC systems.

Clint Boulton is a writer for our sister publication eWEEK.

This article was originally published on LinuxDevices.com and has been donated to the open source community by QuinStreet Inc. Please visit LinuxToday.com for up-to-date news and articles about Linux and open source.