Google officially rolled out its Google Wallet mobile payment system Monday. Is still in its infancy, but the system already shows a lot of promise.

It uses a technology called NFC (Near Field Communication) to securely send your payments digitally.

The only phone in the US that supports NFC is the Google Nexus S, available with t-mobile and Sprint, and there are high hopes that the iPhone 5 will support it too.

Right now, Google Wallet only works with Citi-Mastercards and the Google Prepaid Card. Visa and Google announced a worldwide agreement to support the Visa payWave app, but it will still be up to the financial institutions and banks to add support.

The “tap and pay” method of payment is cool, but the Google Wallet feature that has the most potential is what Google is calling SingleTap. The SingleTap experience means that users can combine their coupons, loyalty cards and payment method all with one tap. It’s an interesting concept … digital save all your credit cards, loyalty cards, and soon tickets, boarding passes, and more.

Security

At first it might be scary to think you will enter all your data into your phone … what if it gets lost? Well, it’s a lot better than if your wallet gets lost … at least your phone has an initial passcode, a second pin number for Google Wallet, and if you’re smart, a remote format feature to securely delete your entire phone’s data should it get stolen.

Privacy

A big question that many would-be users are sure to have about Google Wallet is “does this mean Google knows what I buy.” The answer, at least right now, is no. Google does record local transactions on your phone, but these transactions are only identified by amount and location and are only viewable to you.

In practice, this means that if I look at my Google Wallet history, I only see a date, an amount and an approximate location. Google says that it is working to roll out a more robust digital receipt system in the future.

Diversity

American Express, Visa, Paypal, Google, and the major carriers are all racing towards raining the NFC arena. Google was the first to go-to-market, and there’s a recent announcement that American Express, Discover and Visa have all licensed their NFC technologies to Google, the next step is to get the thousands of financial institutions and merchants on-board with an NFC system.

Other uses

NFC is going to be one of the key technologies of 2012 … with easy communication among phones and cheap RFID tags, we will not only see seamless mobile payments, but also tap to get additional info on any product, posters, magazines, or socially connect to other phones for gaming or networking. NFC’s possibilities are endless - so expect an innovative and fun year to come.