The next step of mobile payments is here.

Google, Citi, MasterCard, First Data and Sprint announced and have demonstrated Google Wallet, an app that will allow phone users to tap, pay and save money while shopping.

For businesses, Google Wallet will strengthen customer relationships by offering a faster, easier shopping experience with relevant deals, promotions and loyalty rewards.

Stephanie Tilenius, vice president, commerce and payments, Google, said the team has built the next generation of mobile commerce.

“With Citi, MasterCard, First Data and Sprint we’re building an open commerce ecosystem that for the first time will make it possible for you to pay with an NFC wallet and redeem consumer promotions all in one tap, while shopping offline,” she said.

Currently in a field test, Google Wallet is expected to be officially available to consumers in summer in the US.

At commercial launch, Google Wallet will support payments with two payment solutions: a PayPass eligible Citi MasterCard and a virtual Google Prepaid card. It will require an app-specific PIN and in the first release, all payment card credentials will be encrypted and stored on a chip, called the secure element, that is separate from the Android device memory and is only accessible by authorized programs.

Google Wallet uses near field communication (NFC) to make secure payments fast and convenient by simply tapping the phone on any PayPass-enabled terminal at checkout.

"Google Wallet allows us to harness the power of mobile technology to enhance our in-store shopping experience and helps bridge the gap between our online and in-store consumer interactions,” said Martine Reardon, executive vice-president of marketing and advertising, Macy's.

Google has also been testing a variety of consumer deals that will be able to be automatically snced to Google Wallet. These offers can range from a 20-percent discount on a new pair of boots discovered on a Google search advertisement; to a $5 off check-in offer received upon entering a store; to a "deal of the day" offering a $20 lunch for $10 at a local restaurant.

At most stores you will be able to use Google Wallet to show your offer at the register, where the cashier will either scan it or manually type it in. At participating Google SingleTap merchants, you will be able to pay and redeem an offer with one tap of your mobile device.