San Francisco: Google`s forthcoming Android operating system will work with a new chip that allows users to tap their phones on in-store terminals to pay for purchases, Google chief executive Eric Schmidt has revealed.
News of the new technology coincided with Tuesday`s announcement by three major US wireless carriers that they were launching a joint venture to allow customers to pay for goods and services with their handsets.
The digital wallet venture by Verizon, AT&T and T-Mobile USA will cover 220 million customers and is expected to roll out by mid 2012.
The venture, called Isis, will use a Near-Field Communication (NFC) chip to securely transmit data from the phone to the retail outlet. NFC chips enable secure wireless data communications over a distance of about 10 centimetres. Customers would be billed through credit accounts run by Barclaycard US, according to the announcement.
"We`re painting a vision of the future; we`re pulling this together," said Isis chief executive Michael Abbot. "It`s all about simplifying the consumer`s life."
The backing of Google`s increasingly popular Android operating system ensures that the technology will not fall into the dilemma of retailers hesitating to install scanners because of a lack of phones.
Nokia has also included an NFC chip in its recently launched C7 phone, while industry reports said that Apple has hired NFC specialists to develop relevant technologies for its iPhone.
"The theory of the case is that you`ll be able to take these mobile devices from everybody, and you`ll be able to walk into a store and do commerce," Schmidt told a mobile conference on Monday in San Francisco. "It could eventually literally replace your credit card."
Schmidt echoed the arguments of NFC`s backers that the technology was far more secure than current credit cards. He said that credit card companies are keen for the system to be deployed as it would cut down on fraud.
"They have a big interest in building out that infrastructure just to deal with their fraud loss rates," he said.
Schmidt said that the next Android operating system, codenamed Gingerbread, would launch in a few weeks.