A recent Google patent application has given a sneak peek into the R&D labs at Google by detailing their plans to release an SMS payment system called ‘GPay’. According to the patent application, GPay will allow users to make payments via their mobile phone for a range of items including products from a vending machine.

The patent indicates that GPay is intended to be a micro-payment system, whereby users can pay for everyday items using an interface on their mobile phone. Examples in the patent include purchases from a vending machine, community honor system and a range of offline vendors.

Some screenshots are below:

Given the widespread rumors that Google will be releasing a mobile phone in the near future, this application could prove to be part of the exclusive “GPhone” offering that would set the handset apart from the rest.

Signs are strong that this patent will evolve into a new Google offering, but will it have the power to trump PayPal in the world of online payments? It’s interesting to note that PayPal currently offers their own mobile payments system. My prediction is that GPay would see the rivalry between the two companies reach new heights.