Magazine article American Banker

PayPal Planning to Support NFC for Mobile Payments

Magazine article American Banker

PayPal Planning to Support NFC for Mobile Payments

Article excerpt

Byline: John Adams

Not many companies are doubling their business estimates for the next year, but PayPal has done just that by projecting a 100% upside for mobile payments. Wednesday it went even further by switching on near-field communication for mobile payments.

The new system was demonstrated at the MobileBeat 2011 conference in San Francisco by Laura Chambers, PayPal's senior director of mobile. An NFC Android widget will be used to transfer money between PayPal accounts by tapping together two Nexus S smartphones (the Nexus S is the U.S.'s only NFC-equipped phone running Google Inc.'s Android software). Chambers told attendees the widget should be available later this summer.

PayPal, a unit of eBay Inc., is using Google's Android NFC software development kit, which should make it easy for PayPal to make its NFC technology compatible with NFC phones that come out over the next year.

The cash transfers are secured by PayPal's payments specification. That means the transaction is executed by an encrypted token, and doesn't touch the NFC secure element, which can store card data and other sensitive information. PayPal has offered mobile payments since 2006 via apps and text message systems, but the ramifications of adding NFC at PayPal are huge, opening up the possibility of the company expanding deeper into mobile payments and treading into added services. This would make PayPal an even more formidable competitor to banks.

PayPal is pushing mobile technology on several fronts. EBay recently acquired Zong, a tech firm that allows users to charge digital goods to wireless phone bills. PayPal's moves also pose a threat to other major efforts to develop mobile payments, most notably clearXchange, a payments venture of Bank of America Corp. …

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