They’re basing it on near field communication (NFC) technology, which would allow you to simply wave your phone at the cash register to pay for stuff.
In this partnership, Google isn’t expected to take fees from the transactions, but get data to help merchants target ads and sell discounts and promotions.
Google would pitch local businesses on offering discounts and ads to people using Google’s mobile payment applications.
Everyone from Google and Apple to banks to carriers to payments services companies to dozens of startups is going after a piece of the pie. Reports about whether Apple intends to support some form of NFC payment with the iPhone 5 are unclear. If Google can come out with this before Apple it would be a great coup, as it would give them a great feature for Android phones Apple doesn’t have.