Google To Introduce New Android Phone with NFC

Google CEO Eric Schmidt announced that the next Nexus One Android OS phone would include an NFC chip so that it could make mobile payments. No details about the phone were announced.

This is exciting news for the NFC payment world. At the same time, let's look at this realistically.

How many people will upgrade their phones to be able to make payments with them?

Will this NFC chip be peer to peer/read write or just a tag?

What will the phone look like and what will it's other killer functions be?

Will Google offer a new payment alternative to Visa, MasterCard and American Express?

Will this be a compelling reason for merchants to upgrade their terminals?

These and other questions will be asked for months to come and then the realities will reveal themselves after the phone is released. You can be sure that Google will do a super job of marketing this phone. You can also be certain that Google is beating up the credit card organizations, banks and processors to get great rates on fees. But if they cannot get merchants onboard with this then it will fail.

Payment has always been the 'next' step for Google. They started with Google Check Out and now will add the mobile payment feature to this. Their strongest competitor in this play will be PayPal who is already working on getting PayPal into the physical point of sale.

It will be a very interesting play to see unfold.