Unnamed sources familiar with the project told Bloomberg that Google’s payment method will be tested at thousands of stores in San Francisco and New York within four months.

The checkout option, these sources told Bloomberg, will work with near field communication (NFC)-enabled phones. NFC allows a device, usually a mobile phone, to collect data from another device or NFC tag at close range. In many ways, it’s like a contactless payment card that is integrated into a phone (in fact, contactless payment cards use the same technology).

With Google’s reported system, customers would touch their phones to a tag in order to check out at special cash registers that the sources said Google will buy for test stores.

While most phones have yet to be equipped with NFC technology, its journey to the mainstream has started. Samsung’s Nexus S, the first NFC-enabled Android phone, went on sale December 16, 2010. Nokia has announced that all of its smartphones in 2011 will support NFC, and Apple recently hired a NFC expert (although it debunked rumors that the iPhone 5 would incorporate NFC earlier Tuesday). Turning the technology into a mobile payment vehicle is high on the list of NFC proponents’ priorities.

In February, Google CEO Eric Schmidt told The New York Times that the company would work to extend offers to advertisers using NFC chips. The service he had in mind at that point would provide ads and offers for items at the point of sale.

Google declined to comment on this article.