Google (NASDAQ:GOOG) has spent the better part of the past 10 years as the center of people’s Internet thanks to the company’s search engine technology. Over the past three years, Google has come close to becoming the center of people’s communications, as the Android operating system has taken a 52% share of the global smartphone market. Starting this week, Google has kicked off its initiative to become the center of your wallet.
On Tuesday, the company opened its Google Wallet service, a tool that ultimately will let users with Android phones use their handheld to pay for goods at checkout counters. It works by using near field communications technology. An NFC chip inside Android phones is recognized by a scanning device used by merchants to complete a sale.
The wallet itself functions similarly to eBay‘s (NASDAQ:EBAY) PayPal, letting users link a credit card to their Google Wallet to provide funds. Within a Google Wallet app, users can set up different virtual credit cards to use before paying with their phone, including a prepaid Google Wallet card with a set amount of money in the account, or a virtual credit card from a bank or credit company. Citi (NYSE:C) and MasterCard (NYSE:MA) both back the service, and those companies that are heavily promoting Google Wallet to encourage adoption by users and businesses alike.
As of now, the only phone to support Google Wallet is the Nexus S 4G phone supported by Sprint (NYSE:S). Unfortunately for Google, that means that the service will have to wait for broader implementation in phones supported by Verizon (NYSE:VZ) and AT&T (NYSE:T) to really gain traction with consumers and, in turn, create a viable new revenue stream for Google.
In the meantime, though, Google is the first big name in technology to bring its mobile payment initiative to market. Apple (NASDAQ:AAPL) has been rumored to be introducing NFC technology for mobile payments into a future iPhone for more than a year, but those rumors have quieted significantly in the lead-up to the iPhone 5′s hinted-at October release. Amazon (NASDAQ:AMZN) also is expected to open an NFC-based mobile payment service before the year is out.
Other competitors are foregoing NFC technology altogether for their mobile payment plans. EBay is going to open limited programs with PayPal later this year that use the cloud for mobile payments. Users will enter their phone number and a PIN number at checkout counters to pay for transactions. Even though it will be late to the consumer mobile payment market, eBay will be the company to beat thanks to the strength of the PayPal brand and the company’s heavy investment in mobile payment technology.
What other stocks will benefit from Google Wallet provided the service is widely adopted? VeriFone (NYSE:PAY) — a manufacturer of payment devices like credit card readers and the sort of checkout devices that will be used for processing NFC mobile payments — already has relationships with Google, Apple and others. The wide adoption of this new mobile business will only help the company, and considering that VeriFone shares have sunk from almost $59 in April to $39 as of this writing, a new source of revenue will only help the company.
Google has gotten to the party early. It’s unlikely that Google Wallet is going to have any significant impact on Google’s earnings at the close of 2011. What the company does have is the opportunity to take up mindshare among consumers before the field becomes crowded. And sometimes mindshare is all a company needs to crush its opponents.
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.