Google and four bank and telecommunications partners on Thursday unveiled "Google Wallet," taking U.S. shoppers a step closer to paying by waving their mobile phones at the checkout counter.

The announcement was made by Google, Citi, MasterCard, First Data and Sprint today at the company's New York City office. Google gave a demo of Google Wallet, an app that is aimed at making users' phone their wallet. Users will be able to tap, pay and save using their phone and near field communication (NFC). Currently, Google is field testing Google Wallet and plans to release it soon.

Google Wallet is aimed at making it easier for users to pay for and save on the goods they want, while giving merchants more ways to offer coupons and loyalty programs to their customers, as well as bridging the gap between online and offline commerce.

Because Google Wallet is a mobile app, it will do more than a regular wallet ever could. Users will be able to store their credit cards, offers, loyalty cards and gift cards, but without the bulk. When they tap to pay, their phone will also automatically redeem offers and earn loyalty points for them. "Someday, even things like boarding passes, tickets, ID and keys could be stored in Google Wallet," Google's engineers on Google Wallet wrote at the company's blog.



At first, Google Wallet will support both Citi MasterCard and a Google Prepaid Card, which users be able to fund with almost any payment card. From the outset, users will be able to tap their phone to pay wherever MasterCard PayPass is accepted. Google Wallet will also sync users' Google Offers, which they'll be able to redeem via NFC at participating SingleTap merchants, or by showing the barcode as they check out. Google added that many merchants are working to integrate their offers and loyalty programs with Google Wallet.

With Google Wallet, Google is trying to build an open commerce ecosystem, and is planning to develop APIs that will enable integration with numerous partners. In the beginning, Google Wallet will be compatible with Nexus S 4G by Google, available on Sprint. Over time, Google plans on expanding support to more phones.