Google’s dream of creating a mobile payment facility is one step closer with Google close to finalizing a deal with MasterCard and Citigroup that will see Android powered devices embedded with technology that allows customers to make purchases directly through their phone at the check-out.

By using near field communication technology (NFC), Google hopes to make credit and debit cards a thing of the past. If the deal goes ahead then customers with a android powered phone will simply wave their phone in front of a small reader installed at the cash counter and the payment will be processed. The idea is to turn the phones into a kind of electronic wallet.

News of this deal comes from The Wall Street Journal who reports that Google has made a smart move by not taking a cut of the transaction money but instead will be tapping into the information and data of mobile payment customer. Google will then probably be sharing this data with the local businesses and retailers who could increase their ROI by targeting ads and discounted offers to Smartphone users near their stores.

Though no exact date is set, the NFC payment system is likely to be made available to Citigroup customers first, who will have to activate an app on their android devices, over the next few months. Google have apparently been in discussion with supermarket giant, Wal-mart about the implentation of the technology in their stores.

It seems shoppers in New York and San Francisco will be the first  to try the new system within four months, if reports from Bloomberg are to be believed.

Tech experts are stating that the NFC payment system is much safer than the conventional card based payment system because it is much more sophisticated than the existing magnetic stripe technology.

Mobile payments are the next big battle ground for all internet companies and Google already seems to be cashing on it, while also posing a big threat to current advertising favorites like Facebook, Groupon and Yelp.

Imagine the possibilities of this venture? People could soon be using their mobile phones to make purchases, track their expenditures and even receive targeted ads and discounts from vendors directly to on their handsets.

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