Google’s new Android phone aims to replace credit cards

By Telegraph
Eric Schmidt, Google’s chief executive, showed off the company’s next Android-powered phone, which will contain a chip that will allow people to make payments via their handsets.
Opening this year’s Web 2.0 Summit in San Francisco, Schmidt showed off the new phone, which had the manufacturer’s label deliberately covered up, but is assumed to be the next Nexus device, following the Nexus One, and will contain a Near Field Communication chip, that will allow people to use their phones like credit cards.
The latest version of Android, called Gingerbread, due to come out in the “next few weeks”, will power this new handset according to Schmidt, and will feature this new mobile payments system as a key tool.
“This could replace your credit card,” Schmidt said. “The reason this NFC chip is so interesting is because the credit card industry thinks the loss rate is going to be much better, they’re just more secure.”
Users will need both a phone with an NFC chip and Android’s Gingerbread operating system in order to activate the technology. The near field communication technology allows people to tap their phones on a symbol or an item in the real world to make an action happen, such as a payment. Schmidt said it will it will allow people to “tap and pay”.
Schmidt stressed that Google had no alliances with any retailers and those relationships would be put in place by the credit card companies and retailers independent of the search giant. Instead Google will partner with third party payment processors.
He also said that Google would not retain any personal obtained through credit card transactions via the phone.
However, despite saying that he could envision this type of mobile technology replacing the credit card, Schmidt would not put a time frame on this migration. Instead he said: “ Who knows? [how long it will take]. I anticipate my credit cards will be around for some time.”
Schmidt was keen to emphasise that the new chip, which is a key feature of Gingerbread, provides a brand new platform for people to start thinking about new apps, which can use the same “bump for everything” technology, as it was described on stage.