PayPal pits its inStore app against NFC as contactless payment war intensifies

By Peter Gothard
31 May 2012 View Comments
paypal-instore-application

Ebay-owned online payment service PayPal believes it can sidestep near-field communication (NFC) chips by way of its on-screen barcode-based inStore app, which enables "Wave and Pay"-like transactions with a mobile phone, but without the hardware modification involved in NFC.

Rolling out at high-street stores Coast, Oasis, Warehouse and Karen Millen today, PayPal clearly hopes its app-based solution will get the jump on NFC, which has been dogged by technical integration problems, most notably at London Transport.

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"PayPal's ‘pay by mobile' service works with the phones most of our customers already own," said PayPal UK managing director Cameron McLean. "And our retail partner doesn't have to install new systems to take in-store mobile payments."

McLean added that the app-based service "underlines our view that mobile payments don't need NFC technology to succeed".

However, the NFC push doesn't necessarily have to involve hardware modifications, either. Barclaycard's "PayTag" sticker, which affixes a near-field chip to handsets externally, could pave the way for similarly hassle-free phone conversion for the long term.

Meanwhile, with Royal Mail announcing plans to fit all its 11,500 branches with NFC tech by 6 June, and other businesses sure to follow in time, it looks likely that the next generation of phones will come with the chip as standard simply to meet a demand that's sure to increase.

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