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There's no reason that almost everything in your wallet can't be handled by your smartphone.

In some circles, the notion of a smartphone acting like a credit or debit card is fascinating, and you see story upon story about mobile payment-enabled smartphones and the potential rise of PayPal, the telcos, and such as the new payment processors. Who cares? Even if Visa and MasterCard were somehow to let go of that billion-dollar processing business, you're merely replacing one financial processor with another.

The fact that a smartphone could act as a card is an inconsequential change. You still have to carry a wallet, and as long as that's the case, a simple plastic card remains easier to use, given that the technology for reading them is universal and all the proposed mobile alternatives require new, often separate, readers and work only with certain vendors -- you'll still be carrying plastic for the other banks' and merchants' systems. As a friend recently said, payments can't get more mobile than they already are.

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Contactless payments have been something of a curiosity in the credit card industry. MasterCard's PayPass has been around for the better part of a decade, but merchants and banks alike seem hesitant to adopt the technology required to make the system work, and inconsistent implementation adds to the confusion -- particularly for customers. Google's new mobile phone-based Wallet service has the potential to transform the technology from its current status as a transaction turkey, to a future as a checkout champion. But will it work? We spent a week with a Wallet-enabled Nexus S 4G, using the device to pay whenever we encountered a MasterCard PayPass terminal. Unfortunately, that wasn't often enough, limiting us to just a handful of transactions in the first week. Still, with Google just beginning to roll out the service and only a limited selection of launch partners ready to go, it's impossible to deliver a complete verdict just yet. Jump past the break for an inside look at Google Wallet, including a video of the service in action, and a brief look at what the world of contactless payments may look like in the future.

Image via CrunchBase

Google today announced an agreement to use current Visa technology to enable mobile payments at retail locations, boosting its e-wallet initiative as the market becomes increasingly competitive.

The Mountain View, Calif.-based company announced it is licensing Visa's PayWave technology, an innovative NFC-based payment technology which enables consumers to make payments at retail locations by waving mobile phones in front of a payment terminal.

PayWave is currently accepted at hundreds of thousands of retail locations worldwide.

Visa account holders will therefore be able to add credit, debit and prepaid accounts to Google Wallet. Google Wallet allows customers to purchase items by tapping or swiping their Android smartphones in front of a merchant's payment reader, enabled by near-field communications, or NFC.

Mobile banking will change your life

Manage your finances while you wait in line at the grocery store

CHICAGO (MarketWatch) — Mobile banking is poised to change people’s lives in ways most of us never thought a bank could.

No, it won’t bake a birthday cake, make a run to the dry cleaner or pick your kids up at soccer practice. But it does hold the promise to put your financial life on a more manageable path than even online banking has managed to do.

It will help remind you when bills are due, how your checking-account balance is looking, and — if this is what you want — could eventually eliminate the need to set foot in a bank ever again.

“We have really seen a complete revolution in customer behavior since we launched mobile banking,” said Arah Erickson, senior vice president of the mobile-banking unit of Wells Fargo(WFC 32.57, -0.18, -0.55%). “Customers are expecting to be able to get things done on their mobile devices when they want to, where they want to and how they want to.”