Paypal goes shopping but NFC is not on its list for point-of-sale technology - Mobile World Live

Paypal goes shopping but NFC is not on its list for point-of-sale technology

19 SEP 2011

Online payments giant Paypal last week unveiled the technologies it will use to compete against rivals as it attempts to move into the market for physical rather than online payments. Features included location-based advertising directed to a user’s mobile phone, the swiping of barcodes to make in-store purchases, scanning QR codes for special offers and entering a mobile phone number and a PIN to make a checkout purchase. In other words, the whole gamut of mobile payment technologies right? Well no, not quite. There was a big omission as Paypal passed on NFC for its payment technology. Yes, it demonstrated how it might use NFC for P2P transactions (in the accompanying video, Dad sends some spending money to daughter) but Paypal didn’t suggest it will deploy the technology for mobile payments at the point-of-sale.

Scott Thompson, Paypal’s president, went further in his blog.  Talking about the new payment technologies and how they will help improve the shopping (and buying) experience, he wrote: “And let’s be clear about something – we’re not just shoving a credit card on a phone.” Later on in the same blog, Thompson had another dig. “The fact is you’ve got to have more than just a shiny new technology to really change the way people shop”.

In a subsequent interview with AllThingsD, Thompson spelt out why Paypal does not rate NFC: “We are not embracing technology, we are solving the problem of what I can do today. It’s hard for me to speak [about NFC] until there are standards. You can’t ask retailers to implement three to five standards,” he said.

Mung Ki Woo, head of mobile for MasterCard (which does back NFC technology), hit back when asked about his rival’s technology a few days later. He said entering a mobile number into a keypad (Paypal’s alternative to NFC) as a payment method “looks like a slow and clunky experience” compared to swiping a card or tapping a phone against a keypad. He also speculated how much work a retailer will be forced to do on back-end systems so that users need only enter a mobile phone (rather than credit card) number.

Thompson’s comments about NFC standards confirm what has become a company line. Two months ago, his boss, eBay chief executive John Donahoe, doubted whether widespread adoption of NFC would occur in large retailers until standards emerged. He also quipped that a retailer had recently said that NFC stands for “not for commerce”. Now the company has shown in one way at least Donahoe wasn’t kidding: it really doesn’t like NFC.

Richard Handford

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Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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