Are you ready to pay for everything via your smartphone? Google is the latest tech company banking on it. At a packed press event in New York, the search giant launched Google Wallet, a method to pay for goods via your smartphone. Google also unveiled a separate initiative, Google Offers, for mobile coupons, working with partners such as Citi, MasterCard, First Data and Sprint, as well as merchants that include Subway, Macy's, Walgreens and American Eagle. Google says it is building an open solution to other financial companies and retailers.

"Your phone will be your wallet — just tap, pay and save," says Stephanie Tilenius, vice president of commerce at Google. Adds Osama Bedier, vice president of payments at Google, "This is just the beginning. We plan to push the limit and innovate in that space."

STORY: PayPal sues Google over mobile payment service

Google isn't the only one at it, of course. The Google announcement follows word that Square, a company headed by Twitter co-founder Jack Dorsey, will also pursue mobile contact-less payments.

For mobile payments to take off, consumer behavior will have to change. But Google points out that while a decade ago 70% of consumers were reluctant to pay for stuff online, today 70% access their credit card information over the Internet. At the start, a Google Wallet will give access to a Citi MasterCard. But it will also include a prepaid Google card that can be funded by any of your credit cards. Google also says it is addressing security with multiple layers of security. "It was a fundamental consideration from day one," Bedier says.

Citi's Paul Galant says this is of "strategic importance" to Citi in its vision to become "the world's digital bank."

Google has other motivations. "Google's interest here isn't in the payments, it's in the data that underlies the complete chain of commerce including consideration, promotion, transaction details, coupons and receipts," noted Forrester mobile analyst Charles Golvin in an e-mail.

Google will begin initial testing of Google Wallet in New York and San Francisco. To start, Google Wallet will be compatible with Nexus S 4G by Google, available on Sprint.

The Associated Press notes that the ambitious plan to transform how consumers pay faces several hurdles, including its initial availability on just the Nexus S. It will connect only to MasterCard PayPass terminals. There are more than 135,000 of those in U.S. stores and restaurants, but that's only a small fraction of the total number, notes the AP.

At the presentation on Thursday, Google executives said the company would be open to partnering with other tech companies including Microsoft, RIM or Apple.

NFC, for Near Field Communications, is the short-range wireless technology built into a phone that helps make contact-less payments happen. Google noted that by year-end there will be many NFC-enabled phones on the market.