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New Jersey Transit announced today it is supporting the Google Wallet, the first transit agency to do so–although it has not introduced its own ticketing application or open-loop fare collection for the NFC-based wallet.

Instead, the transit agency will support MasterCard PayPass applications in the wallet, which riders could use to purchase transit tickets at some vending machines and ticket windows at New York’s Penn Station, along with Newark Liberty International Airport Rail Station and onboard some buses. 

The riders would be tapping to pay with either a Citigroup-issued credit card or the Google Prepaid Card in the wallet, both of which support PayPass. But apparently riders would not be paying their fares directly with their Citi credit or Google prepaid applications, that is, open-loop payment. So the NJ Transit customers would be tapping their phones for tickets, just as they could tap at any of the roughly 150,000 merchant locations that accept PayPass in the United States to make a purchase.

A spokesman for NJ Transit told NFC Times that users would receive paper tickets at the two rail stations. When they tap their phones on certain buses, they would not receive an actual ticket. But in neither the stations nor buses will the PayPass-based payments be direct payment of fares, according to a source at MasterCard. There also would be no digital transit tickets stored in the Google Wallet.

And NJ Transit is not apparently planning to offer related NFC-based services, such as schedule updates or alerts, which riders could access by tapping tags in smart posters. Some transit authorities or transit operators have offered such related services on top of NFC-based transit ticketing in a number of NFC trials the past few years.

But one advantage of buying the tickets via the Google Nexus S 4G phone, the only NFC model now supporting the Google Wallet, is that users could see a transaction record of their recent ticket purchases.

The project also gives NJ Transit and Google an opportunity to generate publicity.

Google used the announcement to send its “Google brand ambassadors” to the busy Penn Station in New York City to further promote the Google Wallet, said a source.

“Transit has been a common element of every major successful NFC effort globally and is a critical component of Google Wallet’s success,” Stephanie Tilenius, vice president of commerce at Google, said in a statement. “Transit is the fastest way to accelerate adoption and reach usage density in major urban centers by habituating the behavior of tapping and paying with phones, and we’re excited to launch our transit effort here with NJ Transit.”

The transit authority, which bills itself as the largest statewide transportation network in the United States, claims the partnership shows the authority is “leading the industry with emerging technologies that will streamline the way customers buy their transportation tickets,” executive director James Weinstein said in a statement.

Among the first service providers that the Isis joint venture announced would support its planned NFC service was the Utah Transit Authority in Salt Lake City. At the time of the announcement, Isis and its member mobile carriers, Verizon Wireless, AT&T and T-Mobile USA, were planning their own payment brand. But they since have dropped those plans and will support established brands, such as Visa and MasterCard.

The Isis wallet is expected to compete with the Google Wallet. Isis will launch a trial in Salt Lake City, along with one in Austin, Texas, in the first half of 2012. The Utah Transit Authority accepts open-loop payment of fares, so could accept MasterCard PayPass, Visa payWave or other major open-loop contactless payment applications on the Isis phones.

NJ Transit participated in a trial last year of open-loop contactless card payment, which also involved New York’s Metropolitan Transportation Authority, or MTA, and the Port Authority of New York and New Jersey. The trial tested interoperability with contactless bank cards.

Readers at MTA subway gates that still accept PayPass should also be able to accept these applications in the Google Wallet.