In the Works: A Google Mobile Payment Service?

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What the Oregon Test Shows

When scanning an NFC-enabled window decal with an Android-based NFC phone, a user can see the business's work hours, check out reviews, rate the business, and get advice from Google on other local businesses. "It's something that helps local businesses," says Sara Heise, an event planner at Voodoo Doughnut, one of the businesses taking part in the Portland test. "It'll allow us to interact with our customers more, especially the younger, texting generation."

To promote the technology and local advertising, Google gave out 22,000 T-shirts at a Portland Trail Blazers basketball game. "We are going to start expanding into more and more cities in the near future," says Lior Ron, group product manager for Hotpot. "We want to make it national."

Global shipments of NFC phones will jump to 220.1 million units in 2014, up from 52.6 million in 2010, according to consultant ISuppli in El Segundo, Calif.

Last year, iPhone maker Apple (AAPL) hired Benjamin Vigier, an expert on NFC technology. The company also filed for a patent on a way to transmit payments from one cell phone to another using NFC. Apple spokeswoman Natalie Kerris didn't return a request for comment. Research In Motion (RIMM), which makes the BlackBerry, filed for a patent on a system that makes NFC payments more secure. RIM spokeswoman Marisa Conway didn't immediately return a request for comment.

An NFC payment and ad service may let Google grab a bigger piece of the U.S. mobile-ad business. The company ended 2010 with 59 percent of the $877 million market, according to an estimate by research firm IDC in Framingham, Mass. "Google is a very innovative company," says Johnson at Isis. "They'll continue to push the envelope and have a number of potential roles to play."

Kharif is a reporter for Bloomberg Businessweek in Portland, Ore.

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