Google is reported to be working on a new mobile payment system with Citigroup and Mastercard that will turn Android phones into electronic wallets.

The Wall Street Journal believes the project to be in early development.

The new system will allow consumers to wave their Android phones in front of a reader at the checkout to make payments.

While the report says Google won’t get a cut of the transaction, it would offer retailers more data about their customers' buying habits.

This could be used to help them target advertisements better or offer discounts when the Android devices are in range of that particular store.

Are you ready to use your phone as your wallet?