With the long-awaited launch of its Google Wallet mobile app for contactless payment, the internet giant is trying to take a slice of store sales.

Already Google takes a cut of many a retailer’s web sales through its pay-per-click advertising scheme. Now with the launch of Google Wallet, for now only in the USA, it is clear that it has its sights set on extending its reach into stores.

The Google Wallet app uses the existing PayPass contactless card readers that retailers have already installed in their stores. But Google says that it isn’t taking a percentage of the transaction processing fee a retailer pays to its merchant acquirer or charging banks to incorporate the payment cards they issue into the app.

So how does Google make money? Google is essentially a data business, and with the Wallet app it is also hoping to attract retailers to let their customers store loyalty cards within the app on their smart phone. Potentially this gives Google access to valuable sales data.  

And Google hopes that retailers will also use the app to push relevant offers to customers searching for products using location-based services. This is like a tuned-up version of pay-per-click, and provides Google an additional way to make money from customers who search for products online that they may then go on to buy in a store.

At the moment the app is only available for one phone on one mobile phone network in the USA. But if Google is to continue to grow at the rates it’s managed up until now, then expect it to continue to innovate in a way that lets it get its foot in the door of retailers’ stores.