Coming Soon to Mobile Phones: the Google Wallet

Google announced a mobile app called Google Wallet that will allow consumers to pay, redeem offers, and earn loyalty points with their phones by storing their credit cards, coupons, loyalty and gift cards. It is currently in field testing and will be available to all consumers in the summer.

Google Wallet is compatible with MasterCard PayPass - a service in which consumers "tap to pay" using a PayPass-enabled card, key fob, device or phone that transmits payment details wirelessly to a high-speed PayPass reader at checkout.

Merchants can obtain "contactless terminals" from First Data, which is offering a special Mobile Starter package through a Google partnership.

Google said it is also working with leading retailers and point-of-sale systems companies to integrate Google Wallet into their checkout systems. Participating retailers include: American Eagle Outfitters, Bloomingdale's, Champs Sports, The Container Store, Duane Reade, Einstein Bros. Bagels, Foot Locker, Guess, Jamba Juice, Macy's, Noah's Bagels, Peet's Coffee & Tea, RadioShack, Subway, Toys"R"Us and Walgreens.

A key benefit to retailers will be the integration of coupons, or offers, into Google Wallet so merchants can directly connect online and mobile advertising with offline purchases, according to the announcement. Google Wallet also provides merchants with a way to engage with customers in-store.

After Google announced its digital wallet initiative on Thursday, PayPal filed a lawsuit against Google and two former eBay executives, Stephanie Tilenius and Osama Bedier, for misappropriation of trade secrets and breach of contract and fiduciary duty. Google has yet to comment on the lawsuit.

Google Executive Chairman Eric Schmidt will be speaking at the D: All Things Digital conference on Tuesday where he will demo the Google Wallet; D will live-stream the session along with sessions on Wednesday featuring Netflix CEO and Founder Reed Hastings and Alibaba Group founder and CEO Jack Ma.