What’s your verdict on NFC? PayPal ain’t so sure…

January 18, 2012

NFCWith modern technology revolutionising the way we communicate, it makes sense that technology will also change the way we bank.

Enter NFC.

Near-Field-Communication is a system which allows you to use your smartphone to pay your way, and complete transactions without having to carry cash or your bank card.

However, while tech giants such as Google and Verizon are convinced NFC banking is the future, eBay’s PayPal, is a little more skeptical.

PayPal’s wary of seeing NFC as the future

“The jury is out on NFC,” says PayPal’s VP of mobile, David Marcus

“It’s not like we hate NFC, and if it takes off, we’ll be on it, but we’re not dependent on NFC’s success to succeed offline, and that’s a very differentiated approach.”

“I really think that it’s a lot of complication and headache for very little added value,” Marcus said.

“And by the time it reaches maturity other technologies will actually be prevalent.”

Meanwhile NFC News reports that PayPal has begun testing new mobile payments software at five Home Depot stores in the US.

Alternative solution

Instead of relying on NFC, PayPal’s system offers an alternative solution to fast banking, by enabling consumers to make payments directly from their PayPal balance by typing in their phone number and PIN.

The advantage of this over NFC is that you don’t need a smartphone which has the NFC technology, and it isn’t necessary to download or pay for any apps.

I think PayPal has caught onto something great here and as a trusted name in banking, I can see many people adopting this modern and simple way of making a purchase.

Strong partnership with AJB

PayPal has partnered with AJB Software Designs, which states it services 20 per cent of the top retailers in North America, and helps connect the point-of-sale terminals at many tier-one retailers to payment processors and financial institutions.

Gigaom reports that “AJB is now incorporating PayPal’s mobile payment system into its framework and building out a specific PayPal interface, which will allow PayPal users to pay through 250,000 point-of-sale terminals that connect to AJB software.”

What do you think of NFC? Can you see it taking off? Or do you prefer PayPal’s method for modernising the way we bank?

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Post your comments!

  • Ian

    NFC is definitely an alternative way for consumers to pay for things, as people are carrying less cash with them, and maybe paying by card taking ‘too’ long (10-12s!), fast contactless payment in NFC sounds promising.

    NFC uses similiar technology to Hong Kong’s original Octopus card, whereby all forms of transport uses one card, launched way back in 1997 and has made travelling around HK so easy and also paying my small purchases, like a Big Mac meal! I just wish the western world would hurry themselves up and start introducing contactless tech, because it will make life simpler and there is definitely room for NFC.

    • http://www.parcel2go.com Sarah Parker

      Do you think the UK are ready for contactless payments though Ian?

      • Ian

        At the moment no, because we don’t have the infrastructure, thus a huge investment would be needed to roll it out nationally.

        One day I would like to use one ‘transportation’ card for all types of public transport and making payments for various small items. If you ever visit HK you’ll instantly take a liking to the Octopus card because it’s just so convenient and you’ll never want to go back to queuing up to buy your train tickets or long stops at a bus stop. Not trying to sound biased at all, but you know that London’s oyster card works the same way, so why not start with contactless transport nationally? And then roll out into different markets.

        NFC would be an innovative move, and it’s important to invest in the future and lay the foundations for future generations.

  • Duncanpoundcake

    Is Paypal’s VP David Marcus a teenager or did he just not pay attention in English grammar lessons?