Tap and Pay: Coming to a store near you (ASAP)

Within the next year, you will be able to “Tap and Pay” with your mobile phone at a third of all retail store and restaurant checkout terminals in the United States. This prediction comes today from Google’s executive chairman Eric Schmidt at the Cannes Lions advertising festival.

Tap and Pay refers to mobile wallet services that let consumers pay by swiping or tapping their smartphone at checkout. No cash or credit necessary. Schmidt says it’s in merchants’ best interests “to convert as fast as they humanly can” to Tap and Pay technology.

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The Financial Times reports that Schmidt sees the expansion of Tap and Pay terminals as a key component of what will become a “trillion dollar” industry of mobile advertising and payments.

How did he arrive at the “one third of all terminals in a year” estimate?

“I judge that based on how long I think it takes, because the terminals are available now, the software is available now or this summer,” the FT reported Schmidt saying. “How long does it take an infrastructure player to upgrade a significant percentage of their infrastructure – it’s on the order of a year, it’s not a week, it’s not a month but it’s also not five years… It’s an educated guess.”

Google is working on revenue diversification, so besides Tap and Pay, Schmidt also talked about display ads. According to Reuters, which was able to snag a sideline interview with Schmidt at the festival, Google will “snap up” companies that handle display ads (i.e. banners and video) in the coming months.

Google is looking to increase its presence in the online display sector. Display ads that appear alongside Google search results provide the bulk of the company’s revenue, which was estimated at $29 billion in 2010.

Earlier this month Google acquired advertising optimization company Admeld, which allows publishers to pull data about advertising from hundreds of ad networks, ad exchanges, and other sources to gauge ad success.

Google announced its mobile payments platform, Google Wallet, in May along with its Groupon competitor, Google Offers. The company’s goal is to turn your phone into your wallet, allowing you to “Tap and Pay” and receive discounts. Click here to read more about VentureBeat’s coverage of Google Wallet and Google Offers.