Bloomberg reported today that Google would start testing its new mobile-payment service in New York and San Francisco over the next few months. The service will allow customers to use their smartphones to purchase products instead of using cash or a credit card. Although the plans have not yet been made public, Bloomberg reports, “The company [Google] will pay for installation of thousands of special cash-register systems from VeriFone Systems Inc. (PAY)  at merchant locations. The registers would accept payments from mobile phones equipped with so-called near-field-communication technology.” The rumors reflect Google’s growing interest in near-field-communication  (NFC), which enables customers to use their smartphone devices at checkout points. Google’s CEO Eric Schmidt introduced  the Android 2.3 with NFC technology back in November 2010 at the Web 2.0 Summit. At the conference, Schmidt praised NFC technology for its advanced security, arguing that NFC demands a higher level of authentication than traditional magnetic strip credit cards. The technology could further streamline customer experiences. According to Schmidt, "The theory of the case is that you'll be able to take these mobile devices from everybody, and you'll be able to walk into a store and do commerce and be able to figure out where you are, again with your permission. It could eventually literally replace your credit card.” What’s more, NFC technology could ultimately be connected to finances, gift-cards, coupons and more, enabling Google to provide more highly directed, more predictive search results, catered to a user’s interests, purchase history and location. As Grant Simmons, Group Account Director at The Search Agency, explains, “NFC takes us a step closer to a passive payment system for day-to-day purchases. Just like driving through a tollbooth can automatically debit your credit card account, so will shopping benefit from product identification, personal verification and ‘automagic transaction’. Google resources behind a project like this I expect will both push acceptance and personalize your shopping (read product suggestion) experience further.” The push toward mobile commerce reflects the growing popularity of smartphone devices in the U.S and rapid growth of the mobile search industry. Google alone saw a 400 percent increase in their mobile search traffic last year. As Mike Solomon, VP Marketing Strategy at The Search Agency, adds, “Mobile Commerce (M-Commerce) has been a long time in coming and is more prevalent in other parts of the world where you can use your mobile phone to buy everything from a soda in a vending machine to music and books. If Google can push adoption for M-Commerce, it will continue the dramatic growth of mobile search over the past few years.” To learn more about the growing mobile search market and the opportunities it presents to online marketers, join us for our Mobile Paid Search webinar  on March 30, 2011 at 12 CDT. Together with the American Marketing Association and Google, we will discuss mobile paid search as an effective means of more directly targeting your customers and improving ROI. Sign up now!