Headquarters: Mountain View, Calif.

Technology: Digital payment software

Why it's one to watch: Google has the technology and the partnerships to make its Google Wallet the most popular mobile payment platform in the U.S.

Google made strides this year with its Google Wallet application, which officially launched in September. The mobile app, which lets consumers make payments with a wave of their Samsung Nexus X phone, works at 140,000 MasterCard PayPass-accepting merchants. Citi is letting its credit cards run on the wallet and First Data is doing the wallet provisioning. Google has signed on 13 large merchants, including American Eagle and Gap and Macy's, to its SingleTap program, in which consumers can pay, redeem offers, and earn loyalty credit within the Google Wallet.

In November, Google announced that it would merge its online payment service, Checkout, with the Google Wallet to form a single product that works on Web browsers and mobile devices.

"At the end of the day from a consumer perspective, the best way to have a wallet product is make it something that's natural and easy to think about and give people one place where they can manage their credit cards, like a physical wallet.," says Rob von Behren, co-founding engineer for Google Wallet.

Although the Google Wallet only works with one phone at this point, the Samsung Nexus S, Google's purchase of Motorola Mobility should give the company the ability to create its own mobile wallet-compatible phones; Google would not comment to Bank Technology News on this matter.

The company is in conversations with other phone manufacturers about making their devices work with the Google Wallet, von Behren says.

Google is also in conversations with several banks to make their credit cards work with the Google Wallet. "Some technical work is required on banks' part to make this happen," von Behren notes. "Many banks host a database system for their customer information that's set up for doing batch processing of credit accounts. They're not set up to issue a card out to a phone in real time." While Sprint is the only telecom network provider on board with Google Wallet to date, Google also has an open call out to all the carriers.

In the coming year, Google will expand its APIs to make it easier for third parties such as Groupon, merchants and banks to interact with the Google Wallet. It will also help merchants and bank partners make the technology adjustments needed to make their software and card programs work with the Google Wallet.