For Google Mobile Payments is a Gateway

Google's "Google Checkout" users to pay for goods in the Android marketplace using their cellphones, and now users also can buy virtual and other goods from inside mobile apps as well. But Google is looking at mobile payments in a broader way, as well, not just as a way of buying digital goods inside apps, or buying merchandise online, but also supporting traditional retail payments.

For some in the market, transaction fees are the whole business. But that isn't likely to be the case for Google.

Google's main business is advertising, and that now includes mobile advertising and likely will extend to mobile promotion and social shopping. For Google, mobile payments could help it leverage the "searching" function that often occurs before a person becomes a "shopper." A direct tie to the "purchasing" function might allow Google to craft new advertising and promotion services, occurring before a sale, in the search phase, while shopping, while checking out, or after the sale.

Mobile payment data also could allow Google to tailor all of its targeted ad techniques with greater richness, and provide key signals about which targeted promotions should be offered to classes of shoppers or individual shoppers, assuming there is an opt-in program. If you know what a person buys, it is easy to figure out what sorts of coupons and loyalty programs should be offered to shoppers in general, or classes of shoppers.

Google plans a major test in New York, San Francisco, and possibly in plans to start testing a mobile-payment service at stores in New York and San Francisco. But some say Google also will be testing in Los Angeles, Chicago and Washington, D.C.

As reported, VeriFone Systems will provide terminals in San Francisco and New York.  ViVOtech Inc. will provide terminals in Los Angeles, Chicago and Washington, D.C.

Google's Mobile Payments Challenge - TheStreet