New York and San Francisco will be the testing grounds for the new technology.
According to a Bloomberg report today, Google (goog) will be testing its Near Field Communications (NFC) payment systems in the next four months, in the New York and San Fransisco areas. NFC payment systems aren't new. They've been deployed in Japan and other markets for almost a decade.
Google will pay for installation of thousands of special cash-register systems from VeriFone Systems Inc. (pay) iPad 2 and iPhone 5 would include NFC hardware. The iPad 2 tear downs revealed no NFC hardware and reports this week indicate that Apple may forgo NFC hardware on the iPhone 5, likely to be released this summer.
If Apple does skip NFC hardware for another year, it will likely give Google a solid window with which to build infrastructure. Apple may in fact choose to skip NFC, instead relying on third parties like Square and other vendors which supply hardware including Apple's own EasyPay iPod touch systems.
Google, however, doesn't have many NFC devices out in the world. The most high profile NFC-enabled device Google has is the Nexus S which is only currently available on T-Mobile, the fourth largest carrier in the US.
More devices are likely on the way however and the ability to use a phone as a credit card should get more manufacturers on board.