Google CEO Eric Schmidt hinted at such a service in November, saying "You’ll be able to walk in a store and do commerce. You’d bump for everything and eventually replace credit cards." Now, BB cites "two people familiar with the plans" as saying the company is "considering building a payment and advertising service that would let users buy milk and bread by tapping or waving their mobile phones against a register at checkout," and that the service may debut this year. 

Actually, it’s not just Google that is looking for inroads in this area. PayPal and Apple would also appear to be interested. In fact, the report suggests that PayPal is even open to partnering with companies like Google.

A service could indeed debut this year from Google, but it seems unlikely that it would gain a great deal of traction so soon. As TechCrunch’s Erick Schonfeld notes, "A lot of things need to happen before it catches on. The chips first need to be embedded in lots of mobile phones (Google, Apple, and Nokia are working on that). But then on the flip side, merchants need to install NFC chip readers at their cash registers, which is an expensive proposition (a few hundred dollars worth of equipment per cash register)."

The original report says, however, that Google is "ramping up efforts to seed merchants nationwide with NFC tags." The company has been handing out NFC kits, including window tags. 

Should credit card companies be worried? 

It was reported back in August that AT&T, Verizon, and T-Mobile were planning a "venture to displace credit and debit cards with smartphones". Meanwhile, companies like Visa and MasterCard were preparing their own potential PayPal competitors.

If Google does release a mobile payments service, it will be interesting to see if it taps into the Google Checkout brand. 

Bloomberg reports that AT&T, Verizon, and T-Mobile USA are "planning a venture to displace credit and debit cards with smartphones". The companies would work with Discover Financial Services and Barclays Plc to test a system starting in Atlanta and three other unnamed U.S. cities.

"The trial would be the carriers’ biggest effort to spur mobile payments in the U.S. and supplant more than 1 billion plastic cards in American wallets," say Peter Eichenbaum and Margaret Collins in Bloomberg’s collaborative report. "Smartphones have encroached on tasks ranging from Web browsing to street navigation and now may help the phone companies compete with San Francisco-based Visa and MasterCard, the world’s biggest payments networks."

Even if the mobile carriers are successful in their venture, it will be a long time before the credit card is truly replaced. Smartphone usage is growing, but these devices are a long way off from being in everybody’s hands.

Meanwhile, it’s not as if the credit card companies are standing still in a stagnant pool of their old world ways. Visa and Master Card have both made moves recently that indicate they are going after PayPal, which is currently a big player in the mobile payments space.

MasterCard announced a developer initiative place MasterCard payment technology in mobile and online apps, while Visa launched its own PayPal competitor starting in Australia.

Om Malik at GigaOm has a good article on the mobile payments industry. He points out that a venture from the mobile carriers may hurt mobile payments startups. 

Would you like to replace your credit cards with your mobile phone? Share your thoughts.

"With this new feature, developers will now be able to accept credit card payments without requiring customers to open up a PayPal account," a spokesperson for the company tells WebProNews.

Guest Payments is a product of PayPal’s Adaptive Payments API, and has been a heavily requested feature for users. PayPal says Guest Payments eliminates the complications merchants, developers, and startups face in accepting credit cards.

"We’re aware that no matter how innovative the ideas are, our developers look to us to provide the features to make it all possible," says Naveed Anwar, senior director of PayPal’s Developer Network. " We’re thrilled to provide this new functionality to meet this need and look forward to seeing the ground-breaking apps our developer community will create with this."

PayPal is starting to get some competition from the credit card companies themselves. Last month, MasterCard announced a new developer initiative, which would place MasterCard payment technology in mobile and online apps. This week, Visa launched new payments service called PayClick in Australia.

Key findings include:

- Mobile shoppers seem to have doubled since February – In a February 2010 Retrevo Study, almost 10% of people indicated they had purchased something using their cell phone. Today, that number has doubled.

- When asked what would make them more likely to purchase something from a retailer using their cell phone, 24% said, not having to provide their credit card info, 13% said if their credit card was stored with the retailer, and 16% said they’re comfortable making purchases from their mobile phones now.

Andrew Eisner, Retrevo’s Director of Community and Content says, "Note to retailers: if you want more sales from mobile customers, make it easy for them to store their credit card info and while you’re at it, keep your eye on retailers like Amazon with innovations like PayPhrase or Mobile Payments Service that might take some of the friction out of online or mobile transactions."

He also points out that apps are making everything easier, and that includes shopping. Retrevo found that about 42% of those who have shopped with their phones said they have used apps to make purchases.

Do you require mobile users to enter credit card info with each sale? Tell us why.

PayPal senior director of SMB Merchant Services Eddie Davis outlines the following changes:

1. Refund Prices – Starting August 10, PayPal will retain the transaction fee (typically $.30) when a seller issues a refund (U.S. and Canada merchants).

2. Chargeback Prices – Starting August 24, we’ll be increasing chargeback costs from $10 to the typical industry rate of $20 (U.S. merchants only, eBay merchants enrolled in the PayPal Preferred program are exempt).

3. American Express Card Acceptance – On July 13, PayPal and American Express will enter into a new card processing arrangement that requires merchants to establish a direct contractual relationship with American Express. You’ll need to accept a new agreement with American Express if you want to continue to accept American Express cards directly through Website Payments Pro and Virtual Terminal. PayPal will continue to service American Express transactions. As part of this new agreement, the fees we charge for American Express payments will change to be on par with their typical industry rates. You’ll also need to make sure that you comply with other terms in the agreement with American Express. As part of this new agreement, American Express pricing will change to be on par with their typical industry rates. You’ll also need to make sure that you comply with other terms in the agreement with American Express. This only applies to taking American Express credit cards directly. There’s no change if a consumer chooses to pay with PayPal, no matter how the account is funded.

Davis notes that standard transaction fees for PayPal payments and direct credit card payments for Visa, MasterCard, and Discover will remain unchanged.

More information on the changes can be found in "policy updates" when you log into your merchant account on PayPal.com.

These rules ban a number of harmful practices and require more transparency in the disclosure of the terms and conditions of credit card accounts.

The site summarizes the main points of the rules and explains how they will affect credit card users. Two interactive features will allow consumers to learn more about the terms and fees of credit card offers and about the new features of their monthly statements.

"These online tools and resources will help consumers make well-informed decisions about their use of credit," said Federal Reserve Board Governor Elizabeth A. Duke.

"We will update the site regularly to provide the most useful and current information."

Information about recent changes in credit card rules is the main focus of the site, but basic facts about common credit card options, interest rates, and fees are also included. Consumers will find a glossary of common credit card terms for quick reference along with a list of federal credit protection laws providing a basic guide for those who want to learn more about their rights.

The site also provides information about common credit card problems–such as lost or stolen cards–and links to resources for consumers who are experiencing problems with