Google Wallet, Offers make debut (live blog)

Editor's note: We used Cover It Live for this event, so if you missed the live blog, you can still replay it in the embedded component below. Replaying the event will give you all the live updates along with commentary from our readers and CNET reporters. For those of you who just want the updates, we've included them in regular text here. To get the key points from today's announcement, you can check out a summary of what got announced, in our story here.

NEW YORK--At a press event here today, Google is taking the wraps off plans to turn smartphones into mobile wallets.

The new mobile payment system will work on select Android-based phones sold on Sprint Nextel's network, according to a Bloomberg report that cited unidentified sources. Google reportedly plans to introduce the service initially in New York, San Francisco, Los Angeles, Chicago, and Washington, D.C.

The service is supposed to use near-field communications (NFC), very short-range wireless communications technology that allows users to pay for things in retail locations by holding a device equipped with a special chip close to a specialized reader at a retail check out.

The event is scheduled to be held at Google's New York offices. It will kick off at 9 a.m. PT/12 p.m. ET. CNET will live-blog the news using the Cover It Live tool. So come back about 20 minutes before the press conference starts to get in on the pre-event chatter and follow the news here as it happens.

Transcript of the live blog starts here:

Noon ET (Bonnie Cha): Stephanie Tilenius, Google VP of commerce, is on stage. "Today, we are announcing a couple of products: Google Wallet and Google Offers." 12:01 p.m. ET (Bonnie Cha): Google's goal is to bring together all pieces of ecosystem to create a new shopping experience. Your phone will be your wallet. 12:02 p.m. ET (Josh Lowensohn): E-commerce was a $227 billion business in 2010, poised to exceed $1 trillion by 2013, Tilenius says. 12:02 p.m. ET (Bonnie Cha): Consumer attitude is changing: 70 percent of consumers access their credit card account via Internet now. 12:03 p.m. ET (Bonnie Cha): We are about to embark on a new era of commerce where we bring offline and online together. Changing how we pay for things will be part of that new era. 12:04 p.m. ET (Bonnie Cha): Ed McLaughlin from MasterCard is now on stage.

12:06 p.m. ET (Bonnie Cha): Smartphones have fundamentally changed shopping experience. McLaughlin cites study that says over 60 percent of 18- to 34-year-olds are perfectly at ease using mobile phone for payments. 12:08 p.m. ET (Josh Lowensohn): Demo time: we're in a grocery store, and Tilenius is explaining how your phone has a list of items you've got on your list. And how the phone can give you a notification that one of the items on your list is discounted. Then once you've found it, and are checking out, you can just pay with your phone. 12:09 p.m. ET (Maggie Reardon): So now we're talking about using the Google wallet in the grocery store. 12:09 p.m. ET (Josh Lowensohn): This is coupled with loyalty programs (read: no more carrying around those extra cards in your wallet). You also get the receipt on your phone, so no more paper to carry around. 12:09 p.m. ET (Maggie Reardon): Google is announcing the first steps and they are emphasizing that they are just getting started. 12:10 p.m. ET (Maggie Reardon): Teaming up with Citi and MasterCard to "tap and save." How will they deliver on their vision. There is the Google Wallet and Google Offers. 12:10 p.m. ET (Bonnie Cha): Google Wallet: Kicking off a field test today. Officially releasing product this summer. 12:10 p.m. ET (Maggie Reardon): Now they are kicking off Google Wallet this summer. With Google Wallet your phone becomes your wallet. They are using NFC and by 2015, 50 percent of smartphones will be NFC-enabled, 150 million devices. 12:11 p.m. ET (Maggie Reardon): For businesses they can strengthen their relationships with customers. Google Wallet will work with Citi MasterCard and can have a prepaid card funded by existing credit cards.

12:11 p.m. ET (Bonnie Cha): Google Wallet is also a wallet that can be locked. Google says it's more secure than the card in your wallet. 12:11 p.m. ET (Maggie Reardon): You can also lock your wallet, which Google claims makes it more secure. There is a Google PIN and encryption and the card is never fully displayed and works with 120,000 merchants in U.S. and 300,000 globally. 12:12 p.m. ET (Bonnie Cha): Field testing in San Francisco and New York first. Working with Macy's, Subway, Noah's Bagels, Toys "R" Us, and more. 12:12 p.m. ET (Maggie Reardon): Starting the offer in San Francisco and New York City and will expand beyond that. Working with some retailers like Macy's, Subway, and Noah's Bagels.

12:13 p.m. ET (Maggie Reardon): Say good-bye to the bloated George Costanza wallet. Google is also announcing Google Offers so that you can store tons of offers so that you don't have to carry all those loyalty cards around. 12:13 p.m. ET (Maggie Reardon): Can tap the card or show the offer to get your discount. 12:14 p.m. ET (Maggie Reardon): There are check-in offers so you get offered stuff when you check into a place. A merchant can also add offers to certain pages and this is evolving so that merchants can get these offers to customers in many different ways. 12:14 p.m. ET (Maggie Reardon): What else do you have in your wallet? A driver's license, concert tickets, etc. And eventually all that stuff can be added to your Google Wallet. Cool but kind of scary, right?

12:15 p.m. ET (Maggie Reardon): Osama Bedier, VP of Google payments, is on stage to talk about some partnerships.

12:15 p.m. ET (Maggie Reardon): He says that it's important to have an ecosystem: not just one company can do all of this. I guess this is a nod to the credit card companies who don't want to be left out of mobile payments. 12:16 p.m. ET (Maggie Reardon): Now we're seeing a demo. Opens an app and scrolls through the really long terms and conditions. And now the Google Wallet is connected to a form of payment and you also need the PIN. 12:17 p.m. ET (Maggie Reardon): As soon as you add the PIN you can then add your credit card, i.e. Citi MasterCard. Now he is showing off his own credit card and he has pre-entered the information, and click continue and it will start to provision the card. 12:18 p.m. ET (Maggie Reardon): Hopefully he was using his corporate Google card in the demo. We all got a little flash of the info on the screen. 12:18 p.m. ET (Maggie Reardon): As soon as the bank verifies that it is really him, asking to connect the credit card to the phone.

12:19 p.m. ET (Maggie Reardon): Then First Data manages the transaction and also verifies. And then he can start using the credit card which is in his mobile phone wallet.

12:20 p.m. ET (Maggie Reardon): You can activate and deactivate cards in the wallet. You also get a prepaid card, so that you can tap and pay at any of the PayPass locations. Click on the card on the screen to add funds to the prepaid card. I guess this is a good way to limit your spending. 12:20 p.m. ET (Maggie Reardon): Two cards will be in the wallet at launch but they will be adding other cards in the future. 12:21 p.m. ET (Maggie Reardon): The over-the-air provisioning and the ability to offer more than one card in the wallet is a big achievement, Google says. I guess that's hard to do and something that other NFC payment networks have not yet done. 12:22 p.m. ET (Maggie Reardon): Security is very important and was a fundamental concern for them, and now the security engineer comes up to the stage. 12:22 p.m. ET (Bonnie Cha): Google says consumer choice is an important component of Google Wallet, so expect to see more support in the future. 12:22 p.m. ET (Maggie Reardon): He is going to talk about the secret sauce for security. Took some best practices from PayPass and added some other things to make it really secure.

12:23 p.m. ET (Maggie Reardon): There is a smart-card chip in the Nexus S. It's what is used in paperless passports and other payment things too. The chip is very secure. 12:23 p.m. ET (Maggie Reardon): It's the NXP PN65. That's the chip. 12:23 p.m. ET (Bonnie Cha): Google jokes that the NXP PN65 smart chip has protection against laser attacks, so you're safe from Dr. Evil. Phew! 12:24 p.m. ET (Maggie Reardon): The chip is only turned on when you unlock the wallet so people can't sniff your phone and get any info. 12:25 p.m. ET (Maggie Reardon): Now we are getting a demo that shows how you can shop with the Google Wallet. 12:26 p.m. ET (Maggie Reardon): We are looking for some denim shorts and we find a coupon from American Eagle for 20 percent off. Can go to the offer section of the wallet and click on coupon where it says save to wallet. As soon as you do that, it shows up in the offers on the phone. The extreme couponers from that show are going to go nuts!

12:26 p.m. ET (Maggie Reardon): He shows how he got an offer from Subway in an e-mail and he saves it to the offer part of the wallet. And it's there in his wallet. 12:27 p.m. ET (Maggie Reardon): Now he shows how he can add his American Eagle rewards card. And Beth McCormick from American Eagle is now on stage to help with the demo. 12:27 p.m. ET (Maggie Reardon): She is showing the point-of-sale system for the demo. So we are going to get the real experience. 12:28 p.m. ET (Maggie Reardon): So he pulls out the denim shorts. Bedier taps his phone and you can see the credit, coupon, and rewards card info.

12:29 p.m. ET (Maggie Reardon): He taps again and you see the AE reward number and then they complete the transaction. It authorizes and then he goes and signs the receipt to finish the transaction. 12:29 p.m. ET (Maggie Reardon): That is single-tap purchasing.

12:30 p.m. ET (Maggie Reardon): Jonathan Wall, another engineer involved in the project, will talk about the single-tap portion of the technology. 12:30 p.m. ET (Maggie Reardon): When you tap your phone it opens multiple secure channels to the merchant so you can send multiple objects. There was a credit card, loyalty card, and coupon all sent to the merchant. 12:30 p.m. ET (Maggie Reardon): This is just the beginning and it's something Google will keep innovating on top of, he says. 12:30 p.m. ET (Maggie Reardon): Coming this fall they will introduce new features so that you can pass digital receipts so that you can keep those receipts in your wallet. That will help me with my expense reports. Woo-hoo!

12:31 p.m. ET (Maggie Reardon): There might be games to the wallet or some kind of pieces to a puzzle. Google really wants to give merchants new ways to engage with consumers. 12:32 p.m. ET (Maggie Reardon): Now Bedier is back on stage and he is demonstrating how you can tap on an icon on a poster to get yet another special offer. And that offer then shows up in the digital wallet.

12:33 p.m. ET (Maggie Reardon): This is just the beginning, Bedier said. And now we're going to a video that will show us what the future will look like. Hold onto your hats! Here we go! 12:33 p.m. ET (Maggie Reardon): People are in coffee shops and tapping on offers and then they get special thank you rewards from merchants. 12:34 p.m. ET (Maggie Reardon): People in the future really look happy shopping with their phones. And they are all really good looking. 12:35 p.m. ET (Maggie Reardon): A waiter brings the bill for someone's b-day party, they're able to pay just by tapping their phone. I wonder if you can split the bill on multiple phones? Hmm. 12:35 p.m. ET (Maggie Reardon): Now Google is offering an open invitation. Is this another giveaway? Nah, I forgot this isn't Google I/O. 12:35 p.m. ET (Bonnie Cha): You can find a list of merchants here. 12:36 p.m. ET (Maggie Reardon): Google is touting how the system is open and how that drives innovation. They say it all the time. Android already has 100 million phones in the market.

12:37 p.m. ET (Maggie Reardon): What does an open wallet look like? Bedier said that you can add lots of different "objects" to the wallet. So you can add any object in that wallet. 12:37 p.m. ET (Maggie Reardon): Google doesn't charge for access to the wallet and Bedier says that no one will have an advantage over another. So smaller businesses can also add objects to the wallet.

12:38 p.m. ET (Bonnie Cha): For right now, Google Wallet will only work with the Samsung Nexus S 4G from Sprint. From Google Wallet's FAQ: Google Wallet can be installed on Nexus S 4G available on Sprint, and potentially over time, other mobile devices and platforms as well. 12:38 p.m. ET (Maggie Reardon): Some of the partners already signed up are Citi, MasterCard, First Data, and Sprint. 12:38 p.m. ET (Maggie Reardon): Paul Galant from Citi comes on stage. He's in a suit and tie--very financial-services-type guy. 12:39 p.m. ET (Maggie Reardon): He says it's a privilege to be on stage with all these other partners. Rah. Rah. Rah! 12:39 p.m. ET (Maggie Reardon): Citi has a long and successful history with partnerships and today's Google's Wallet is another example.

12:41 p.m. ET (Maggie Reardon): A new Citi branch was opened in Union Square this year and it's supposed to show the future of branch banking. 12:42 p.m. ET (Maggie Reardon): Google Wallet represents true innovation, Citi guy says. 12:42 p.m. ET (Bonnie Cha): According to Google, you don't need cell service to use and make payments using Google Wallet but your phone will need to be powered on. 12:43 p.m. ET (Maggie Reardon): Sorry the Citi guy isn't saying anything interesting. They are working with Google to make life easier for customers, yada, yada, yada. 12:44 p.m. ET (Maggie Reardon): We are just at the starting point and in time there will be numerous systems, but no doubt that today's announcement will be the inflection point. Today it starts, it will move to mass market. 12:45 p.m. ET (Maggie Reardon): Ed McLaughlin from MasterCard is now on the stage. He's making the case for why Google Wallet won't eat away at their business. 12:46 p.m. ET (Maggie Reardon): Now he's giving a pitch for why the MasterCard network is better than others. And he says that Google just adds to that with bringing this to the smartphone.

12:47 p.m. ET (Bonnie Cha): I'm surprised they haven't talked about what happens if you lose your phone or if your phone gets stolen. I know a lot of you are asking about that in the chat room too. The only info I can find is from the FAQ about that, says same rules that apply to unauthorized use of your plastic credit card apply to Google Wallet. 12:47 p.m. ET (Maggie Reardon): PayPass is already bringing payments to thousands of people and merchants. And he says it's a fundamentally better experience than any other way of payment. 12:47 p.m. ET (Maggie Reardon): Ed Labry from First Data is now on the stage. Another suit. He's been with First Data for 27 years.

12:48 p.m. ET (Maggie Reardon): He said that never a question of whether this day would come but a matter of when. And they are proud to be here. Hip hooray! Go Google. 12:48 p.m. ET (Maggie Reardon): OK, let's get done with the cheerleading. 12:49 p.m. ET (Maggie Reardon): In 1989 you couldn't use a credit card in the supermarket. Really? I guess I am even too young to remember that. I was still in high school in '89. 12:49 p.m. ET (Maggie Reardon): First Data has 4 million locations where it processes financial payments and they have relationships with 7,000 banks it works with. 12:50 p.m. ET (Maggie Reardon): They process 40 billion transactions a year. Been in business for over 40 years. 12:51 p.m. ET (Maggie Reardon): More than 50 percent of all financial transactions in the U.S. are processed by First Data. Wow, they are in a good business. 12:52 p.m. ET (Maggie Reardon): There are a lot of companies that talked about the vision about the mobile wallet and mobile commerce. But this is something that is not vaporware. It can be used across the street at Chelsea Market where the phones can be used. 12:53 p.m. ET (Maggie Reardon): Now CTO of Sprint Fared Adib is taking the stage.

12:54 p.m. ET (Maggie Reardon): Sprint has a long history of working with Google. Sprint was one of founding members of Android Open Development group. And integrated Google Voice to their service and also was the first 4G provider to offer a 4G Google phone. 12:55 p.m. ET (Maggie Reardon): Sprint takes a jab at other carriers that might be trying to get too far into mobile payments. You should be getting this service from the brands you already trust like Citi and MasterCard. Sprint just wants to help enable. So take that Verizon and AT&T if you had other ideas! 12:55 p.m. ET (Bonnie Cha): Sprint is going to work with OEMs--Samsung, HTC, Motorola--to bring this technology on new devices. 12:56 p.m. ET (Maggie Reardon): Android is the fastest selling product on Sprint's network. 12:57 p.m. ET (Maggie Reardon): Google exec back on stage. And now I think they are showing another short video to show who is working with Google. 12:57 p.m. ET (Maggie Reardon): Martine Reardon from Macy's is on the screen. No relation to me ;) 12:58 p.m. ET (Maggie Reardon): Subway will be another retail partners. And American Eagle as we saw in the demo. Walgreens is yet another partner.

12:59 p.m. ET (Maggie Reardon): American Eagle exec thinks this will change the way people shop. What do you think? 1:00 p.m. ET (Maggie Reardon): Macy's exec thinks it will keep shoppers happy and in the store longer. And the longer you're in the store, the more money you spend. Ick. I feel so dirty, are we all just being exploited? 1:00 p.m. ET (Maggie Reardon): Some other merchant partners are Bloomingdale's, Guess, Toys "R" Us, and many more. 1:01 p.m. ET (Maggie Reardon): Today field testing. The launch will happen officially this summer.

1:02 p.m. ET (Maggie Reardon): Google is not collecting money when transactions happen. 1:03 p.m. ET (Maggie Reardon): We are in the Q&A portion. 1:03 p.m. ET (Maggie Reardon): Google will be collecting location info to get targeted with offers. 1:04 p.m. ET (Maggie Reardon): If you lose your phone the payment cards are stored on the secure chip that is part of the hardware. So if you know the PIN you can't copy. They can also pull the cards off your phone if you lose it. 1:05 p.m. ET (Maggie Reardon): Will this be available on other platforms? And Google says yes if they put NFC chips on their phone. And if they want to partner. Google is willing to work with them. 1:05 p.m. ET (Bonnie Cha): In terms of iPhone, RIM, Google says it will work with everyone but it will depend on whether these companies open up to NFC. 1:06 p.m. ET (Maggie Reardon): Chicken-and-egg scenario. Google says it needs to prove that this is a viable business and then companies need to decide which flavor of NFC to use. 1:06 p.m. ET (Maggie Reardon): Android phones are 50 percent of phones being sold today so Google is making a bet on NFC. 1:07 p.m. ET (Maggie Reardon): Sprint: This will take some time but someone has to take the lead. And NFC isn't that complex to implement. And think of how far they have come, but Nexus S has about 5 different antennas. 1:07 p.m. ET (Maggie Reardon): Someone had to get things started like Bluetooth and Wi-Fi and Sprint believes we are on the cusp of that. 1:09 p.m. ET (Maggie Reardon): For use cases outside of payments then the PIN needs to be entered. And the phone needs to be on to be used. But for non-payment use cases you don't need to have the PIN entered. So if you want to download the offer, you don't need the PIN entered. 1:10 p.m. ET (Maggie Reardon): Google believes the security is high enough you don't need to still sign at merchant's point of sale, but merchants still want it. 1:11 p.m. ET (Maggie Reardon): How will Google make money? Google is in this to create the ecosystem and they make money on offers, which is traditional advertising business. And the wallet is free. 1:12 p.m. ET (Maggie Reardon): What are the plans to go outside of the U.S.? Will look at Europe and then Asia. And Google is already in discussions with banks and networks in other parts of the world. The app can be downloaded even without NFC, and you can get a sticker. 1:12 p.m. ET (Maggie Reardon): Future Google Android phones will all have NFC in them. 1:13 p.m. ET (Maggie Reardon): What happens when the battery on the phone dies? Google says that you probably have to use the plastic. 1:13 p.m. ET (Maggie Reardon): The average consumer looks at their phone 40 times a day. So most people who use smartphones have power cord with them. 1:15 p.m. ET (Bonnie Cha): Important question now about who owns the data and whether they will sell it. 1:15 p.m. ET (Maggie Reardon): Data about customers: Who owns it? The partners and the consumers own their data. MasterCard: Making a payment through a cell phone can be scary. And fear is important for us to understand. Reason why Google partnered with Citi, MasterCard, and First Data is that they needed to keep your data safe. 1:15 p.m. ET (Maggie Reardon): Sorry, that was the Citibank exec talking. 1:16 p.m. ET (Maggie Reardon): Google will always give consumer control over their own data. We have to deliver some kind of value for even having consumer data. So that's important too, Bedier from Google says. 1:17 p.m. ET (Maggie Reardon): Google isn't disclosing how many people in NYC and SF are part of the field trials. 1:19 p.m. ET (Maggie Reardon): OK, that was the final question for the presentation. And now guests get to have some lunch at the Google cafe! 1:20 p.m. ET (Josh Lowensohn): Thanks for joining us everyone. For more on Google Wallet and Offers, along with a roundup of the event head over to CNET News.

Editors' note: The original, bare-bones version of this story was posted May 25 at 2:42 p.m. PT.