Users of the Vodafone Wallet app in a number of European countries will be able to make NFC-based purchases on their Android smartphone in locations such as shops and restaurants from their PayPal account.
The agreement between the two companies will enable “millions” of PayPal customers to add their accounts to Vodafone’s wallet app, which is supported by more than 70 NFC-based Android smartphones, according to Carta Worldwide, a tech vendor who worked on its deployment.
More details will be disclosed at next week’s Mobile World Congress.
Vodafone’s wallet app is currently available in five European markets: Germany, UK, Italy, Spain and the Netherlands.
The launch date for the new service is later in 2016.
The involvement of PayPal is interesting since it has previously expressed a sceptical attitude towards NFC technology.
An alliance on contactless payments fills a space in its strategy, which currently covers in-app, mobile remittance and P2P payments. PayPal has found enabling point-of-sale transactions in locations such as shops and restaurants a harder market to crack.
PayPal and Vodafone developed the new service in partnership with Raphaels Bank and Carta Worldwide.
Vodafone’s wallet app works with its SmartPass pre-paid account which is linked to a subscriber’s Visa-based credit, debit card or bank account, which they use to top up the account.
A year ago, Vodafone and Visa announced they would enable credit and debit card contactless payments directly from the wallet app (rather than via SmartPass account) from Q2 2015.