Google is working on a potential partnership with electronic-payments company VeriFone Systems, as the search giant moves to convince shoppers to use their mobile devices to pay for goods in retail stores, according to a media report.

"Google, as part of its goal to allow shoppers to use their mobile devices, rather than physical credit cards, to pay for goods in retail stores, is working on a potential partnership with electronic-payments company VeriFone Systems Inc," The Wall Street Journal reported citing a source.

VeriFone makes what are called point-of-sale terminals that stores across the country use to process credit-card payments.

As part of the potential tie-up with Google, VeriFone's terminals would be able to accept payments from mobile devices that are embedded with technology called near-field communication, or NFC, the report added.

Google's Android mobile-phone software powers hundreds of different types of devices. The latest Android software, called Gingerbread, includes support for NFC technology while other mobile-device makers, including BlackBerry maker Research in Motion Ltd, have said they would build smartphones embedded with the technology, the report added.

Among other things, NFC technology lets third-party developers create mobile-payment applications, so people can use their phones as digital wallets, tapping them against a register when checking out of a store.

Meanwhile, the report said Google later this year is looking to test its mobile-payment service in stores in New York and Portland, Ore, among other places,

Google has been handing out posters embedded with NFC technology that businesses can place on their street-facing windows so that NFC-enabled mobile devices can detect the posters and give the mobile users more information about the store.

According to the publication, Google's move to facilitate payments through NFC technology would help expand its core advertising business, which currently consists of letting advertisers place text, graphical or video ads on websites

Google hasn't elaborated on how the system would work or how it would make money from helping to facilitate mobile payments.