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NFC is here — is contactless payment the future of commerce?

At the forefront of this rollout is Google, which has teamed up with MasterCard and CitiGroup to produce the service. It’ll work via Google Wallet2, an app that allows customers with compatible phones to begin using NFC. To address security concerns, a dedicated chip called the Secure Element, separate from a phone’s memory, uses MasterCard’s secure encryption technology to protect credentials as they are transferred. In addition, PIN code authorization is required to carry out a transaction in the same way as a regular card. While Google has obviously gone to great pains to secure users of the Wallet, how effective those measures actually are remains to be seen – rule of thumb is that storing credit card details anywhere with online access leaves those details open to hackers. To encourage consumers to use the service Google plans to work in a series or promotions and discounts from associated retailers offering money off vouchers and loyalty schemes – similar to the one currently offered by Starbucks, that are sent to a phone and can be instantly redeemed in store. You’ll need an NFC enabled phone to get involved. The Nexus S 4G, available on Sprint, is the only Google Wallet enabled phone currently, but an increasing number of new handsets are looking to include the technology as standard, suggesting that NFC is likely to become widespread much sooner than many of us could have predicted.

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