Google's next Android-powered smartphone could eventually replace credit cards according to the search engine giant's CEO Eric Schmidt.
The phone in question was revealed at this year's Web 2.0 Summit in San Francisco, and will contain a Near Field Communication chip that enables mobile payments.
Although the manufacturers label was covered during the display, the phone is thought to be a Nexus device.
Gingerbread, the latest version of Android, due to land in shops within a month, will power this new handset according to Schmidt, and will feature this new mobile payments system as a key too.
"This could replace your credit card," Schmidt said. "The reason this NFC chip is so interesting is because the credit card industry thinks the loss rate is going to be much better, they're just more secure."
For users to use the new device as a credit card, they will require both a phone with an NFC chip and Android's Gingerbread operating system. To complete a transaction, users will need to tap their phones on a symbol or a designated item within the retailer which will make an action - like a payment - happen. Or "tap and pay" according to Schmidt.
Schmidt also outlined that Google has no affiliation with particular retailers and that it would partner with third-party payment processors. He also said that Google would not retain any personal data obtained through credit card transactions via the phone.
Google's Android operating system now has a market share of 25.5 percent worldwide, up from 3.5 percent in the same period a year ago, according to the latest figures from Gartner.
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