A model demonstrates a Nexus One smartphone, the first mobile phone Google will sell directly to consumers, after a news conference in Mountain View
Google's flagship Android phone, the Nexus S, supports NFC technology. REUTERS

Google is inching closer the debut of its mobile payment system, The Wall Street Journal reports.

The paper says Google is teaming up with MasterCard and Citigroup to bring its mobile payment system to consumers. Using an application available on near field communications-equipped phones, Citigroup card users will be able to use their phones to pay for purchases.

The move is believed to leverage Google's advertising business, giving the company greater insight into how users view targeting advertising. Google isn't believed to take a share out of transactions initiated through the system.

Earlier this month Bloomberg reported that Google plans to test the program in New York and San Francisco. The trial is set to begin within the next four months. VeriFone Systems Inc. will manufacture the contactless readers.

NFC support is included in Google's flagship phone, the Nexus S. With the embedded NFC chip Nexus S phones allow users to read information embedded in a variety of objects, including posters and advertisements. But the most lucrative potential in the technology lies in its ability to be used for mobile payments.

A representative from Wal-Mart also confirmed that Google had met with the company to brief it on the system, but said that the talks were preliminary.