Online payments giant PayPal has revealed it is again testing NFC, though the company’s president has made clear that he’d like the company’s platform to be technology agnostic and he doesn’t see the long-term success of NFC as assured.
“We are obviously doing trials around NFC ourselves at this point, but I think the real key and the thing I believe in is that any great open technology payments platform has to have, at its heart, this idea of being technology agnostic at the point-of-sale,” PayPal president Dan Schulman told investors during eBay’s first quarter earnings call as the company recorded a 40% year-over-year growth in mobile payment transactions.
“We continue to see an increase in mobile payment transactions, now reaching nearly 30% of our overall transactions, with mobile payments transactions growing over 40% year-over-year,” Schulman said. “We did over 1bn mobile payments transactions last year; we think that the world is moving increasingly towards mobile payments.”
But, Schulman warned: “Even though NFC is beginning to gain some momentum, it’s still probably 2% to 5% of the point-of-sale terminals out there in the marketplace, maybe more on a transactional basis. I have seen many times where we think one technological standard is going to emerge and it’s eclipsed by something else.
“What I would like the PayPal platform to be, and what we are building towards and have a lot of capabilities already, is the ability to be able to utilise your mobile phone not just via NFC but [with] QR codes, Bluetooth, HCE — it really depends on what the merchant has upgraded towards.”
PayPal has in the past taken an anti-NFC stance, though then-president David Marcus revealed last year that the company was looking again at NFC as one of “three technologies that might truly change the retail experience as we know it”.
“I think if you bet on a single technology it’s a risky proposition and it takes a lot longer to move into the marketplace,” says Schulman. “I’m a big believer that you don’t want to just enable a form factor change; we don’t want to just substitute a card swipe for a phone tap. You really want to think about what is the value proposition change that you are going to do.
“How can you, with that phone tap, enable a merchant to get ever closer to their consumers through either rewards, loyalty, couponing, offers and associate that with the payment choice the consumer wants to pay with, whether it be a debit card or credit card, private label, Bill Me Later, whatever it may be? That’s what we want to provide.”
“The advent of Paydiant, Braintree and PayPal all coming together is a real head start for us moving into [offline payments],” Schulman continued. “It’s not so much that we want to move into the offline world, it’s that the offline and online worlds are moving that way naturally and they are moving that way through mobile, and that plays right into a strength that we have right now.
“Everything we’ve done in the first six months of my tenure is positioning PayPal to take advantage of what I see as one of the greatest opportunities for growth that the payments industry has ever seen. We have a lot to execute on; I’m excited about where we are, what we are building and about PayPal’s strong position and potential in this dynamic market.”