PayPal will announce a shift in its NFC stance this morning with two initiatives – an upgrade to its app that will support the technology and an alliance with Vodafone Group for contactless payments.
Customers in the US and Australia will be able to make NFC-based payments using the PayPal app on their smartphones, starting in the second quarter.
In addition, the payments giant has joined forces with Vodafone so the operator’s mobile wallet users in a number of European countries can make NFC-enabled payments.
The service is initially available in Spain, starting this week. Other European markets will follow later in 2016.
PayPal’s announcement is an acknowledgement that NFC has gained some traction over the last 18 months. The technology has gathered a number of high profile supporters, including Apple, Samsung and Google.
The previous stance of the payments firm and its former eBay parent was very different. eBay CEO John Donahoe famously described NFC as standing for “Not For Commerce”.
And former PayPal president David Marcus (now at Facebook) expressed scepticism about the technology on several occasions.
PayPal was spun off from eBay last summer, leaving it freer to make its own strategic choices. Beyond its core online payments business, PayPal has a presence in peer-to-peer (Venmo), remittances (Xoom) and in-app payments (Braintree).
Adopting NFC fills a gap in this line-up, which is in-store payments.
In trying to match rivals such as Visa and MasterCard, PayPal must be available to users in locations such as shops and restaurants.
Separately, the payments firm will put some meat on the bones of a previously announced partnership with America Movil. Unlike the Vodafone announcement, this does not cover NFC.
Telcel in Mexico and Brazil’s Claro, both America Movil subsidiaries, will add PayPal capability to their mobile wallets. The update will come in Spring, initially for users to top up their prepaid accounts using PayPal.
Finally, PayPal-owned Xoom has struck an agreement which will enable its users to send remittances direct to the accounts of M-Pesa users in Kenya, the most well know mobile money service in the world, which is operated by Safaricom.