At an event today, Google, Citi, MasterCard, First Data and Sprint announced and demonstrated Google Wallet, an app that will make your phone your wallet so you can tap, pay and save money and time while you shop. For businesses, Google Wallet is an opportunity to strengthen customer relationships by offering a faster, easier shopping experience with relevant deals, promotions and loyalty rewards.

At commercial launch, Google Wallet will support payments with two payment solutions: a PayPass eligible Citi MasterCard and a virtual Google Prepaid card. Most people who already have a PayPass eligible Citi MasterCard can simply add it to Google Wallet over the air, using First Data's trusted service manager service. Or, they can fund the Google Prepaid card with any payment card.

Google Wallet uses near field communication (NFC) to make secure payments fast and convenient by simply tapping the phone on any PayPass-enabled terminal at checkout. It is engineered to enable secure payments and will require an app-specific PIN. In the first release, all payment card credentials will be encrypted and stored on a chip, called the secure element, that is separate from the Android device memory and is only accessible by authorized programs.

Google Wallet is built to work with the fast growing MasterCard PayPass network-a merchant point of sale service that enables consumers to tap to pay. As a result, Google Wallet will immediately be accepted at more than 124,000 PayPass-enabled merchants nationally and more than 311,000 globally.

The first Google Wallet field tests are focused in New York and San Francisco, where many retailers, Coca-Cola vending machines and even taxis are PayPass-enabled, including major outlets such as CVS, Jack in the Box, Sports Authority and Sunoco.

Google Wallet is currently in a field test and will be available to consumers this summer. Also, Google is in talks with other companies to join the Google Wallet initiative. You can get more information about Google Wallet on Google’s website. We have added a video below in which merchants talk about Google Wallet.