PayPal Ditches the NFC Bandwagon
As the market for mobile commerce heats up, PayPal has decided to withdraw from the pursuit of NFC-based payment applications, according to a report by Wall Street Daily.
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PayPal stated that it felt the technology would be a “step backward” for point of sale transactions. The company’s decision is likely attributable to its recent NFC pilot program, which was wrapped up in Dec. 2011.
Upon ending the pilot, the company reported a lack of investment and interest by the retail industry. PayPal further stated that the overwhelmingly lukewarm response would not prove to be enough to sustainably propel the project going forward.
However, the company emphasized its commitment to mobile commerce. The company is currently working to find a similar service that will satisfy consumers and retailers as well as outpace NFC technology.
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Related: PayPal Innovation Guru Shares Secrets to POS Success
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Comments
Paypal's vision of commerce is compelling, but too exclusive...
Paypal is forgetting that POS will remain in stores for many many years. Why ? Because many many people will stick to plastic cards.
And the US POS migration to EMV will introduce NFC at the same time. Yes, it is a long journey to migrate 8 M POS in the country. But maybe not much longer than to integrate Paypal acceptance software in any cash register.
By the way, this EMV migration will cause another problem to Paypal. Chip & PIN will become the standard, and also the basis of liability along the value chain. Merchant will benefit of liability shift only for card present transactions... and paying with Paypal at POS won't be a card present transaction. So Paypal will have to handle liability... and fraud... (fraud always migrate very quickly to the weakest point in the chain)
So, I'd bet that Paypal will integrate back NFC in one or two years time. No big deal for them.
At the end of the day, this is all good marketing buzz from Paypal against current NFC competitors who strive to make it happen !
Posted by bruno, 10/02/2012 9:51am (3 months ago)
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