PayPal backs out on NFC, focuses on mobile transactions

PayPal backs out on NFC, focuses on mobile transactions

In a somewhat surprising turn of events, PayPal has doubled back on their initial support of Near Field Communication (NFC) technology, dropping the development of their NFC mobile point of sale transaction plans. David Marcus, PayPal’s VP of mobile, clarified this move by stating, “By the time NFC catches up, we’ll be in a world that will move away from the point-of-sales terminal.” To this end, they are refocusing their efforts instead on a different sort of payment system wherein your mobile phone number is attached to your PayPal account with a pin code. In a point of sale situation, the PayPal user would choose PayPal at the checkout area and enter their mobile number followed by their pin number; following payment a receipt would be sent to the mobile device attached to the account.

The theory here would promote convenience for the buyer because they wouldn’t have to pull out their wallet or mobile phone, and convenience for the seller because it would require mainly a software update, rather than installing new hardware. As a perk, users of PayPal’s new system would also get a credit card to use when the default payment method was not available.

Here’s my issue with this system. When using a credit card, NFC, or any physical payment system, in order for a thief to use what’s yours at a point of sale, they have to somehow physically take something from you, be it your wallet or your phone. With PayPal’s new system, the thief only needs information: your phone number and your pin. I’m sure there will be safeguards against this sort of thing, but people are already wary of NFC, an arguably secure system (in most situations). Giving them even less control may be a bit much, even for something as splendid as convenience. Time will tell, of course, both for NFC and PayPal’s new system, but this writer won’t be forsaking his wallet anytime soon.

Source: Wall Street Daily, via PhoneScoop

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Mitch Wright
Mitch Wright 93 posts

Genius. Innovator. Magical elf. None of these things spring to mind when thinking about Mitch Wright, but now they will, thanks to this bio. Mitch works as a phone technician and writer when he's not spending time with his awesome wife and two wonderful kids. He's been using a smartphone since the HTC Touch and is a ROM flashing fanatic on his current phone, the Galaxy Nexus.

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  1. John
    February 15, 22:47 Reply

    That seems like going backwards, from 2 factor authentication (something you have, eg a card and something you know, eg a pin) to just something you know, chip and pin isn’t perfect by any means, but it’s a lot better than one factor authentication

  2. rickysiebold
    February 16, 01:00 Reply

    when you leave the house and forget your phone or wallet you feel naked,  there’s no better security than that.   how do you feel when someone else gets your phone number and pin? nfc is the perfect combination of something you’re going to have with you regardless and constant up to date security.   this is a mistake by paypal and i think their ceo is going to find that out shortly. 

  3. Xcwatts
    February 16, 01:59 Reply

    I would rather use nfc there is no way I standing at the till entering a 15 digit number (11 phone number 4 pin) what a pain up the ass that would b.

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