Google launches Google Wallet

— -- George Costanza of Seinfeld no longer has to schlep his famously overstuffed wallet. Google today released the Google Wallet app that turns the Sprint Nexus S 4G smartphone into a mobile payment device you can use instead of carrying all those plastic credit cards.

The search giant has been testing Google Wallet since spring. Among its partners: Citi, MasterCard, Sprint, First Data, Visa, Discover and American Express.

Monday's rollout reaches Nexus S phones through an over-the-air update. "We pledged a commitment to an open commerce ecosystem," Google Vice President of Payments Osama Bedier wrote in a blog post.

For now, the Nexus S is the only phone that can handle the Google Wallet. But Google plans to add the capability to other devices. Google won't say how many Nexus S phones have been sold.

"The limited availability of Google Wallet makes the launch largely symbolic in many respects," writes Greg Sterling in Search Engine Land. "But because of Google's brand clout and visibility mobile payments are now on the radar."

The Wallet exploits short range wireless technology known as Near Field Communications or NFC. Inside the app are virtual replicas of your physical credit cards. At the outset, you can use Google Wallet to pay with a Citi MasterCard and/or a Google Prepaid card, which can be funded with any of your plastic credit cards.

Google is adding $10 to the Prepaid card as a bonus to early Wallet customers.

You can use Google Wallet to make "tap and go" payments at merchants who accept transactions through the MasterCard PayPass Network: There are 140,000 PayPass locations in the U.S. The Wallet app is tied closely to the Google Offers coupon service that promises daily deals and discounts.

Bedier writes, "In the future our goal is to make it possible for you to add all of your payment cards to Google Wallet so you can say good-bye to even the biggest traditional wallets." To hammer the point home, Bedier's blog post includes a link to a video of Seinfeld's Costanza, aka Google Wallets' "first customer."

Best Buy, Home Depot, McDonald's and Whole Foods are among the merchants likely to accept payments through the Google Wallet. But widespread acceptance is by no means guaranteed. Persuading people who have used plastic to pay for stuff for decades to change their behavior is a daunting task.

And Google faces potentially stiff competition. Some of the biggest names in finance and technology have set their sights on the mobile payments space, including the rival ISIS mobile commerce network that was formed in November among major wireless carriers AT&T, T-Mobile and Verizon Wireless.

Yankee Group senior analyst Nick Holland says for Google the payments business "is kind of the gravy more than anything else. Where the real value is and where Google has an interesting play is in advertising, couponing, location based services and all that stuff."