PayPal is working on its own solution of contactless transactions after it said Near Field Communication (NFC) would be left behind in a wave of new payment technology.
NFC is set to feature heavily in mobile devices launched this year and more and more shops are expected to support contactless payments via mobile devices. PayPal, however, has other ideas.
PayPal's VP of Mobile David Marcus told All Things Digital: "By the time NFC catches up, we'll be in a world that will move away from the point-of-sales terminal."
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What's the big idea?
The eBay-owned company has instead created its own system which links your PayPal account to your mobile phone number and a pin code.
The idea is that when you go to pay in a shop all you need to do is enter your mobile number and your pin code. An electronic receipt is sent to your mobile phone and you don't need your credit card or phone to complete the transaction.
A key advantage of PayPal's system for retailers is that the software can be integrated with a shop's existing payment system, where as NFC requires new hardware to make payments possible.
This allows shops to use the same system for both cash and card payments as well as the new PayPal system.
There is stiff competition in the market with Google already offering its Wallet function and a joint venture in the UK between the main networks working on their own NFC solution set to launch later in 2012.
NFC is a key technology to watch this year - will it change the way we pay forever or fail to make an impact?
From Wall Street Daily