PayPal has unveiled a forthcoming smartphone application which will allow users to make payments to each other by tapping two NFC-enabled handsets together.

The service, which joins Google Wallet as an NFC-based payment service, will make its debut later this year on the Samsung Nexus S Android phone, which has a near field communications chip on-board.

The app requires one user to request payment, the phones are then held back-to-back until the NFC connection has been made. The second user then enters a password and the money is transferred.

PayPal says it will roll the app out to more Android phones as NFC tech becomes more popular on new handsets.

Evolving

"There's a lot of technologies evolving around mobile payments, and NFC is just one of those," said Laura Chambers, senior director of PayPal.

"What we're doing is testing out NFC. We're getting it into the markets, we're getting it into the hands of consumers and we'll see how it goes."

The PayPal app is the latest NFC innovation to hit the scene following the arrival of Google Wallet and payment services from the likes of Visa and Mastercard.