Google, Citi and MasterCard create Android payment system

In association with Citigroup and MasterCard the search giant Google is developing a mobile payment system to allow Android phone owners to use their mobile phones as a kind of electronic wallet, reports the Wall Street Journal, citing people with the knowledge of the case.

With the new technology which is still at its early stage of development customers will be able to wave their Android phones in front of a small reader at the checkout counter to make payments, the Journal reported.

This way Google will be able to offer more data to its advertisers about their customers and help them provide more precisely targeted ads. Google will unlikely earn any revenue on the venture.

Initially, holders of Citigroup-issued debit and credit cards would be allowed to pay for purchases by activating a mobile payment application developed for one current model and many coming models of Android phones, the paper said.