Ask anyone in the technology industry about where they think the future of mobile payments is headed and they’ll all probably give the same answer: near-field communication. PayPal has been a successful pioneer in online payments but it disagrees that the future of mobile payment will rest with NFC.
That’s somewhat of a contrary view, as Google is pushing NFC with Google Wallet, AT&T, Verizon Wireless, and T-Mobile are also looking to NFC for its their joint-venture ISIS.
PayPal believes its own payment service could make a major impact on the mobile field before NFC can really start rolling. It has some convincing reasons, too.
“By the time NFC catches up, we’ll be in a world that will move away from the point-of-sales terminal,” PayPal VP of mobile David Marcus told AllThingsD.
PayPal rightly claims that NFC support requires new software and modified hardware. Instead of going through that hassle, customers can choose a PayPal checkout option at businesses, punch in the phone and PIN numbers associated with the account, and the appropriate amount of money is transferred to the business. To ease the transition to smartphone payments, PayPal even sends users a free debit card connected to their account so they can pay from their online balance, but with a familiar format.
PayPal might be on to something here because this actually sounds like a much simpler way to utilize mobile payments. Although with all the money being invested into NFC technologies, if PayPal wants to act upon what it promises, the time to do so is now.
Update: PayPal reached out to us because it felt like this story may have over simplified its position. PayPal’s Anuj Nayar sent this about the company’s NFC position:
“I read your story about PayPal ditching NFC with interest. Our position on NFC has never changed. We consider it an interesting technology that may play a part in delivering PayPal’s goal of anytime, anyway, anywhere payments that make money work better for buyers and sellers. NFC is one of many technologies that we’re watching closely; in fact, some of our products already use NFC. Right now Android users with NFC-enabled phones can make P2P payments using the PayPal App; and we’re also testing in-store NFC payments with a few stores in Sweden but please don’t mistake our testing of the technology and its features with NFC as a strategy.
In today’s retail environment, many sellers don’t have NFC-enabled POS systems and most buyers don’t have NFC-enabled phones. As we’ve said, if NFC becomes more widely available and consumers want to use it, PayPal will certainly enable NFC payments. In the meantime, we’re addressing the friction points that exist in commerce today by ensuring PayPal’s digital wallet works with retailers’ existing POS systems and on devices that consumers already own.”