Google Applies For 'GPay' Mobile Payments Patent

Adding to its rapidly growing suite of mobile applications and
services, Google(GOOG) has applied for a patent for a mobile payments
service that would allow users to make payments at retail shops using
their mobile phones.

Using text messages, the system dubbed "GPay" would authenticate
payments, debit the purchaser's account, and credit the seller's
account.

Originally filed in February 2006, the application was made public by
the U.S. Patent and Trademark Office last week.

Perceiving that future growth will come largely from advertising to
mobile users, Google has launched an ambitious series of initiatives
to accomplish in the mobile world what it has done in the online
universe. The company has been making many of its popular online
applications, including its leading search engine and its Google Maps
and Gmail services, available on mobile phones over the last couple of
years. Google has also signaled its intention to bid in the upcoming
FCC auction of valuable wireless spectrum in the 700-MHz band, and in
July it entered into a partnership with Sprint Nextel(S) to provide
users of the WiMax network the No. 3 U.S. carrier is building with Web
services including e-mail, chat, and social networking tools.

Described as "a computer-implemented method of effectuating an
electronic on-line payment," the system referred to in the patent
application is similar to existing mobile-payment services, including
the mobile version of PayPal. Such services have been available for
some time but have had little success breaking through with merchants
and with customers.

In June Verizon(VZ) Wireless, the No. 2 U.S. carrier, said it would
offer subscribers mobile-payment options through privately held
Obopay. Verizon called the service "the first mobile payment offering
for any major U.S. carrier." Three weeks later Obopay announced the
closing of a third round of venture funding, worth $29 million.

Google already has an online payment system called Google Checkout,
launched a year ago. In May it released the mobile version of Google
Checkout, which works only for online purchases.

The difference between existing mobile payment systems and GPay (the
term the application says would be used to initiating payment sessions
via text message) is, of course, that GPay is backed by Google. In
theory, Google could offer merchants a discount on (or elimination of)
transaction processing fees in exchange for advertising purchases by
the merchant -- making it a much more formidable competitor to other
novel forms of payment being brought to market by large financial
services companies such as Visa.

Still, the growing array of Google mobile initiatives doesn't have a
cohesive centerpiece until the long-rumored mobile device with the
Google brand -- already dubbed the GPhone and reportedly in
development by Taiwanese handset manufacturer HTC -- makes its
appearance.

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