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Google Wallet sets the bar for possible Apple NFC platform

by Phil Hornshaw

Google laid out its plans yesterday for Google Wallet, a new mobile payment platform that uses near-field communication technology to allow users to complete transactions at stores using their smartphones.

That makes Google (GOOG) and its Android platform the first big mobile company to take a step into the NFC arena, but it might not be alone there for long.

Rumor has it, Apple (AAPL) also is considering adding near-field communication technology to its future iOS devices, possibly starting with the next iteration of the iPhone (although what exactly that might be and when it’s coming out is debatable). If that’s the case, Apple could either throw in with Google – which doesn’t seem likely, although Google stated during its press event yesterday that it would accept partnerships and left the door open for Apple and others – or it could create its own platform.

Near-field communication is a technology that allows mobile devices to interact with other devices, like credit card payment terminals in stores. Google’s Wallet platform allows users to save things like credit cards and business loyalty cards to their devices, tapping or waving them near terminals in order to use the cards to pay for transactions just like they would swipe a credit card. The difference is, with Google Wallet, all the portions of a transaction, like swiping a debit card, entering a pin and using a loyalty card, are completed at once.

Google’s platform also includes another service called Google Offers, which allows users to pull in coupons from participating retailers and save them to Google Wallet. It also includes a check-in service that lets users get access to deals just by going to their favorite stores, or frequenting them often.

While it’s probably a long shot that Apple’s iOS operating system will incorporate Google Wallet, given the two companies’ rivalry in the mobile world, Google has gone far to set the bar for what Apple might create if and when it adds NFC-capable chips to its future iPhones. Google has done a great job of finding partner companies, like MasterCard (MA) and Citibank (C) as well as retailers such as Macy’s (M), to help it launch Google Wallet, and that kind of support goes a long way toward helping customers adopt a new technology like NFC.

But Google might be laying down the paving stones on a road Apple can now use. Google Wallet integrates with MasterCard’s PayPass service and payment terminals made by VeriFone (PAY). These two aspects of the technology could make it universally appealing and create the “clear standard” for which, rumor has it, Apple has been waiting.

And while Google Wallet is cool, Google has left the door open for NFC technology to be used by third-party developer to create Android apps. The company hasn’t yet capitalized on that capability itself, though; meanwhile, Apple excels at building killer apps for its devices. If Apple uses Google Wallet as a product baseline, but bolsters the whole lineup with some quality, innovative uses of NFC (which can include uses for anything, including retails transactions), it could easily create a robust competitive service, despite Google’s lead.

What’s not clear yet, despite rumors, is whether Apple wants to go forward with NFC at all. It’s possible the company will adopt a bit of a “wait and see” attitude, since NFC won’t be added to iPhones until next year, according to reports. That gives Apple time to watch Google roll out its service this summer and deal with whatever bugs pop up along the way, then make a decision whether to offer a similar Apple Wallet service, or not.