It's called near field communications, and Google thinks it's the next step in moving the world into a cashless society. Preparing for a trial run in New York and San Francisco, Google will be providing businesses with prototype Veriphone NFC wireless terminals which will enable customers to make purchases using their smartphones. In addition, NFC supported smartphones will be able to redeem digital coupons, update gift card balances, use loyalty cards and other retail features designed for retail checkout. And it's not some minor experiment either. Google is reported to be paying for the installation of thousands of NFC-enabled terminals at retail locations all across both cities.
The first NFC wireless supported smartphone was the Google Nexus S, the pure Google experience on a Samsung Galaxy S with no overlay. Currently, the NFC hardware is limited to just reading tags from Google Places enabled items. But in the future, with this city wide trial, it's likely that Google will push an OTA update to enable other NFC features. The way it may work is that users will be able to tap their smartphone against a specific point on the register, ala the Mobile FastPay method, which will then read the customer's financial information via WiFi or Bluetooth connection.
It'll be interesting to see how the trials works out and how long before they expand the trials nationwide. It'll also be interesting to see how Google/Veriphone will prevent accidental charges or breaches in security. There's already programs that can sniff radio packets and glean personal information. But security issues aside, we may be seeing the dawn of a cashless society.