PayPal to Introduce NFC P2P Payment Service

PayPal today unveiled its first NFC-based service, demonstrating peer-to-peer payments facilitated by users tapping their Google Nexus S NFC phones together.

The large online payments service, a unit of Web marketplace eBay, plans to introduce the service in late summer, said Laura Chambers, senior director for PayPal Mobile, who demonstrated the service at the MobileBeat 2011 conference in San Francisco.

“But at PayPal, we’ve said all along that consumer behavior won’t change unless we’re able to offer an experience that’s truly better than what’s available today,” said Chambers in a blog post today. “We’ve been looking at NFC technology for a while, and we saw a tremendous opportunity to combine the best of NFC and the best of PayPal.”

As with other PayPal mobile-money transfers, the funds are still sent over the mobile network, with the sender entering his PayPal PIN code to complete the transaction. But instead of opening PayPal’s app and filling out the fields, users would initiate the transfer by entering the P2P request into a PayPal widget, a sort of miniature application that sits on the home screen. They would then tap their phones on the NFC phones of the persons from which they are requesting money. 

PayPal, which projects it will handle $3 billion worth of mobile payments in 2011–a forecast it has already increased two times–is planning to make the jump to the physical point of sale. NFC is important to its mobile strategy, but is not the only technology it is investigating. And the NFC P2P service is apparently separate from its POS strategy, which it has yet to reveal.

EBay last week announced a $240 million acquisition of m-payment company Zong, which enables users to buy digital goods and have the purchases billed on their mobile phone bills. That followed two acquisitions in the spring–of mobile advertising and recommendations service Where and mobile-payments startup Fig Card, which uses WiFi technology and USB tokens to enable merchants to accept payments from smartphone users at physical stores. PayPal has also offered P2P transfers on Android phones and the iPhone with technology from Bump, which enables users to shake their phones together to make exchanges. The technology uses both the network connection and accelerometers to pinpoint users.

“This (NFC) is just one of the many ways we’re using different technologies on different devices to change the way people pay and get paid,” Chambers said.

The NFC P2P payment service likely will be available only on the Nexus S phones when launched later this summer, though more Android-based NFC phones are expected later in the year that could support the service. And PayPal could develop software for other mobile operating platforms.

According to a video PayPal released today on the P2P service, a user could request money by tapping a request-money button in the widget on her home screen then entering the amount and tapping a separate request-money button. She would then tap her NFC phone against the NFC phone of the person from which she is requesting money and would wait for the phone to buzz. This confirms the request for money has been transferred.

After what appears to be a second tap, the sender would enter his PayPal PIN, which initiates the money transfer over the mobile network. PayPal would send the recipient an e-mail confirming the transfer to her PayPal account.

PayPal would secure the transaction in part with an “encrypted token,” according to reports, but this token does not refer to the secure element embedded in the Nexus S.

 

HEADLINE NEWS

Australian Transit Agency to Launch Mobility-as-a-Service Trial as It Pursues Long-Term MaaS Strategy

Plans by Transport for New South Wales, Australia’s largest transit agency, to launch a trial enabling users to plan, book and pay for multimodal rides is the next step toward the agency’s long-ter

Updated: U.S. Transit Agency Seeks to Reduce–Though Not Eliminate–Cash Acceptance with New Fare-Collection System

Updated: The Spokane Transit Authority in Washington state confirmed that its new fare-collection system will include contactless open-loop payments–with a beta test planned for next October, a spokesman told NFC Times' sister publication Mobility Payments.

UK Government Seeks to Bring London-Style Contactless Fare Payments System to Other Regions

The UK government’s plan to equip 700 rail stations over the next three years to accept contactless open-loop payments is a major initiative, as it seeks to replicate the success of London’s contactless pay-as-you go fare payments system elsewhere in the country–a goal that has proved elusive in the past.

More Cities in Finland Expected to Move to Open-Loop Fare Payments

A fourth city in Finland is beginning to roll out contactless open-loop payments, with “more in the pipeline,” according to one supplier on the project, making the Nordic country one of the latest hotspots for the technology.

Moscow Metro Expands Test of ‘Virtual Troika’ in Pays Wallets, as It Continues to Develop Digital-Payments Services

Moscow Metro is recruiting more users to test its “Virtual Troika” card in two NFC wallets, those supporting Google Pay and Samsung Pay, as one of the world’s largest subway operators continues to seek more ways for its customers to pay for rides.

Ohio Transit Agency Expects Significant Revenue Loss as it Builds Equity with Fare Capping

The Central Ohio Transit Authority, or COTA, officially launched its new digital-payments service Monday, including a fare-capping feature that the agency estimates will cost it $1.8 million per year in lost fare revenue, the agency confirmed to Mobility Payments.

Special Report: Interest Grows in ‘White-Label EMV’ for Closed-Loop Transit Cards

As more transit agencies introduce open-loop fare payments, interest is starting to grow in use of white-label EMV cards that agencies can issue in place of proprietary closed-loop cards for riders who don’t have bank cards or don’t want to use them to pay fares.

Swedish Transit Agency Launches Express Mode Feature for Apple Pay, though Most Ticketing Still with Barcode-Based App

Skånetrafiken, the transit agency serving one of Sweden’s largest counties, announced today it has expanded its contactless open-loop payments service to include the Express Mode feature for Apple Pay.

Major Bus Operators in Hong Kong Now Accepting Open-Loop Payments–Adding More Competition for Octopus

Two more bus operators in Hong Kong on Saturday launched acceptance of open-loop contactless fare payments, with both also accepting QR code-based mobile ticketing–as the near ubiquitous closed-loop Octopus card continues to see more competition.

Moscow Metro Launches Full Rollout of ‘Face Pay;’ Largest Biometric Payments Service of Its Kind

Touting it as the largest rollout of biometric payments in the world, Moscow Metro launched its high-profile “Face Pay” service Friday, as expected, and predicted that 10% to 15% would regularly us

Indonesian Capital Seeks to Expand to Multimodal Fare Collection and MaaS

Indonesia’s capital Jakarta, whose metropolitan area is home to more than 30 million people, is notorious for its stifling traffic congestion. In response, the government metro and light-rail networks and now it is funding an expansion of the fare-collection system to enable more multimodal payments and to build a mobility-as-a-service platform.

Exclusive: NFC Wallets Grow as Share of Contactless Fare Payments and Not Only Because of Covid

Transit agencies that have rolled out open-loop contactless payments are seeing growing use of NFC wallets to pay fares, as Covid-wary passengers see convenience in tapping their phones or wearables to pay.