PayPal dismissed NFC technology, and instead suggested that its own service will pave the way for mobile payments.
“There simply aren’t that many NFC enabled phones out there and we don’t see NFC as something that will happen very quickly,” said Anuj Nayar, PayPal’s director of communications, to TechCrunch.
Nayar pointed out Google Wallet currently works only on select NFC-capable phones like the Nexus S. He added merchants have been slow to accept Google’s service since it requires a specialized checkout terminal, suggesting mass adoption is still three years away.
Instead, Nayar predicted, PayPal’s non-NFC mobile payment solution, planned for release later this year, will be able to secure more consumer and merchant cooperation than NFC-based solutions like Google Wallet. The “one stop” online and offline system is set to run on all mobile devices, feature personalized, location-based and in-store offers, and provide merchants with data to use in targeted advertising.
PayPal’s coming system sharpens the divide between the two types of mobile payment solutions, and may give non-NFC systems like Square a boost against rival NFC ventures like Google Wallet and Isis.
Square’s Keith Rabois, like Nayar, also eschews NFC, instead touting a cross-platform credit card reader that merchants can plug into a mobile device’s headphone jack. Rabois too says his system works since it does not require consumers and merchants to make major changes like abandoning familiar plastic cards, for example.
But PayPal and Square will have to contend with Isis, an NFC-powered mobile payment venture among carriers, credit card companies and now handset makers. The initiative recently garnered support from phone makers like HTC, Samsung and Motorola, among others, who pledged to install Device Fidelity’s NFC-capable microSD cards in their handsets next year, expanding NFC functionality to more phones.
This move will likely boost mass adoption of Isis and other NFC-based systems like Google Wallet, since it means more phones besides the Nexus S will be able to process contactless payments.
PayPal’s future plans, if successful, may boost non-NFC mobile payment adoption against rival Google Wallet and the Isis initiative, since it takes advantage of a wide user base and existing relationships with credit card companies and banks. The company has a long fight ahead, however, as Isis gains strength that will likely protect Google’s e-wallet.