NEW YORK: Google, the online giant, has launched its new "tap-and-pay" Google Wallet service, which allows consumers to buy goods in stores using smartphones.

Based on Near Field Communications technology, the firm's app was initially made available only on the Sprint Nexus S 4G handset, and to shoppers possessing a prepaid card or a Citi MasterCard.

MasterCard currently boasts 120,000 PayPass terminals in the US that are compatible with Google Wallet, and more than 300,000 such payment points worldwide.

Elsewhere, Visa has given Google a global licence for its payWave system, which has a similar reach to PayPass. Discover Financial Services and American Express are also both due to come on board soon.

"This is just a beginning for us, it's version 1.0, but we expect the product to move quickly and add new features over the coming months, as well as us increasing the number of banks and handset providers that we partner with," Osama Bedier, Google's VP, payments, told the Financial Times.

Macy's, Bloomingdales, American Outfitters, Toys R Us, and Walgreens are just some of the retailers already involved with Google Wallet, even though popular uptake cannot be guaranteed.

"It's another step of migrating everything we do onto a single device," said Noah Elkin, an analyst at eMarketer. "But consumers have been taking their cards out of their wallets for years and they don't have a great problem with that."

Google predicted 150m US smartphones should support wireless payments by 2014. In anticipating this shift, it also rolled out Google Offers, providing vouchers and discounts on mobile handsets.

"Where the real value is and where Google has an interesting play is in advertising, couponing, location based services and all that stuff," Nick Holland, a senior analyst at Yankee Group, said.

Bob Egan, founder of The Seraphim Group, forecast 50m NFC-enabled smartphones will be shipped in the US in the next 18 months, but sounded a warning. "You're asking people to do something they don't do right now," he said. "It doesn't happen overnight."

The likely competitors to Google Wallet going forward include an effort from AT&T, T-Mobile and Verizon, called Isis, while eBay's PayPal is pushing its credentials, and Visa is developing in-house tools.

"We believe there will be a number of different alternatives that will become available and there won't be one that becomes a standard," said John Partridge, president of Visa.

Data sourced from Financial Times, Business Week, Mashable, USA Today; additional content by Warc staff