NFClogo

MWC 2012: PayPal Criticises NFC Payment Systems

PayPal warns against NFC while Intel gets behind the technology

On by Max Smolaks 0

Near Field Communication (NFC) payments could replace credit cards with mobile phones, but internet bank PayPal has warned the technology might be out of date before it even appears on the market.

At the same time Intel has announced a partnership with Visa to enable NFC payments on its future smartphones.

Internet Money

NFC is a form of very short range (about two inches) wireless communication that can enable consumers to make fast and secure payments at retail locations by simply waving their compatible mobile phone in front of a payment terminal.

Working on NFC brought together technology companies such as Google, Vodafone and Orange on one side, and financial service providers like Visa and Mastercard on the other. Google has been especially active in this field with its Google Wallet application, which had security issues last month.

The transition to NFC payments will not be easy. Switching would require new equipment for retailers and new phones for consumers.

“For NFC to succeed you need consumers to have the handsets, and merchants to install the terminals,” PayPal’s head of mobile, David Marcus, sai. “It will take time for NFC to get mass adoption. By the time NFC catches up, we’ll be in a world that will move away from the point-of-sales terminal” (quoted in various sources, including  The Guardian).

Rather than focusing on NFC, PayPal and Apple are working on online alternatives which could be simpler to install. In the UK, the Pizza Express restaurant chain already has a PayPal app which sends the bill to a customer’s phone and allows them to pay without using a till or a credit card.

Apple has chosen a different approach, testing use of iTunes as a virtual bank. Since iTunes is already connected to user’s bank account or credit/debit card, the only thing necessary to pay for the shopping is to scan the barcodes of the items, and then enter an Apple ID into the phone.

Marcus said that PayPal was the only payment method created for the internet age, reminding that it has 106 million active customers and supports payments in 25 currencies. PayPal business model is difficult for rivals like Google to replicate, because this requires negotiating a multitude of foreign exchange, tax and legislative barriers.

In the UK, Everything Everywhere, O2 and Vodafone are developing a joint NFC initiative as well as working on individual solutions, and they have been reluctant to work with Google.

Radio Money

Meanwhile, Intel announced a strategic agreement with Visa to develop mobile commerce solutions. During a press conference at MWC, the companies outlined collaboration plans to enable Intel’s Atom-based smartphones to use NFC payments.

“This is another example of how Visa is making mobile payments broadly available across devices and operating systems and is ensuring that mobile commerce applications are aligned with existing technology and security standards established by the global payments industry,” said John Partridge, Visa president, during the press conference.

The company has certified Intel’s reference smartphone powered by the Intel Atom processor for use with payWave, Visa’s NFC mobile payment technology. Since Intel has already shown it is willing to sell its reference phones through mobile network providers, the consequences of the partnership might be visible very soon.

“Intel’s strategy is to enable more secure and compelling user experiences across a range of Intel-based mobile devices. Our alliance with Visa builds on this strategy and brings worldwide mobile payment and commerce solutions to Intel-based devices,” said Mike Bell, Intel Vice President and General Manager of the company’s Mobile and Communications Group.

How well do you know Internet security? Try our quiz and find out! 

Max Smolaks
Author: Max Smolaks
Reporter
Max Smolaks Max Smolaks Max Smolaks
Techweekeurope for mobile devices
Android-App Google Currents App for iOS

Last comment




0 replies to MWC 2012: PayPal Criticises NFC Payment Systems

Leave a Reply

  • Required fields are marked *,
    Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>