If you visit a McDonalds drive through you’ll notice they now have signs advertising contactless payment. And Barclaycard ran a huge promotional campaign, including an iPhone game, about contactless payment too (remember the waterslide through the city?).

So, it is little surprise that Google, one of the greatest innovators of our time has gone into the market by capitalising on its Android operating system for mobile phones. Here’s how Google explains its new Google Wallet…

In the past few thousand years, the way we pay has changed just three times—from coins, to paper money, to plastic cards.

Now we’re on the brink of the next big shift.

Google Wallet is an Android app that makes your phone your wallet. It stores virtual versions of your existing plastic cards on your phone. Simply tap your phone to pay and redeem offers using near field communication, or NFC.

This is just the beginning, but we believe that, in time, your phone with Google Wallet will be the one thing that holds everything you need to carry.

Google Wallet is only available so far on one mobile phone model – the Nexus S 4G by Google, available on Sprint. Over time, they plan to expand support to more phones.

This all makes a lot of sense. Mobile phone penetration is at an all time high – which is marketing speak for “everyone’s got a mobile!” and the technology is advanced enough to allow them to be used for doing a lot more than making phone calls. So why not combine the phone with your wallet so that you have one less thing to carry around?

The problems might come if someone steals your phone or you lose it. Although Google has built in plenty of security so that nobody can steal your money if they get their hands on your phone, it does mean that you are left without your bus fare home when your phone gets stolen. But then that’s not really any different to a normal wallet, is it? However the fact is that because it is all in one handy package you can’t call anyone to tell them you are stranded and penniless.

Hmm, contactless payment sounds great, but I might keep a few coins tucked away in my pocket just in case of emergencies…