After all the hype surrounding near field communication (NFC) technology, PayPal joins the competition with a rudimentary service allowing users to make payments by tapping their mobile devices together.
The PayPal mobile application is expected to roll out sometime this summer, available for the Samsung Nexus S, which operates on the Android operating system. The app will be available for more models and handsets as companies start releasing more NFC-capable phones.
To send money, both phone users turn on the service and the payee requests a dollar amount. Next, users must tap their phones together to request the transaction, and wait for a buzz to signal it went through. The payer will enter a PIN and then the amount of money to be transferred, and the money is sent followed by a confirmation email. A demonstration is shown in the video below:
Financial institutions and merchants look forward to more widespread adoption of NFC, which will ease payments and create new ways for consumers to interact with their money. The opportunities will grow, as the technology would allow consumers to make purchases in a store, redeem coupons and access merchant reward points, and even split a restaurant bill with the sensor of an NFC-equipped mobile phone.
“There’s a lot of technologies evolving around mobile payments, and NFC is just one of those,” said Laura Chambers, senior director of PayPal Mobile. “What we’re doing is testing out NFC. We’re getting it into the markets, we’re getting it into the hands of consumers and we’ll see how it goes.”
This announcement comes as a new report from Juniper estimates that mobile transactions will reach $670 billion by 2015, up from $240 billion in 2001. The company says mobile payments, money transfers and NFC transactions will each grow by at least 200% over that time frame, due to the emerging mobile payment market.
According to Juniper, PayPal Inc. alone has increased its mobile payment projections for 2011 to $3 billion from $2 billion. That projection transcends NFC payments, but still demonstrates how popular mobile payments are becoming.
Although one might wonder how this NFC technology differs from the app they rolled out last March which allowed users to transfer funds by bumping iPhones, it shows that product developers are fully embracing NFC by preparing products to utilize this extremely powerful and potentially industry-changing technology. Of course, NFC technology, a topic which we have covered extensively and is already available, doesn’t stop at finances as it will let users exchange almost any information through its secure contactless channels.
While in theory the possibilities are endless, it remains to be seen how soon the technology will be adapted, how it will be implemented by different programs, and how users will feel about the whole experience.