The mass adoption of near-field communications (NFC) technology is still at least three years away due to a lack of integration with merchants and consumers, according to PayPal’s communications director, Anuj Nayar. Speaking to TechCrunch, Nayar is sceptical about the technology’s long-term success, claiming that the advantage of PayPal’s mobile payments platform, and similar non-NFC services, over Google’s recently-rolled out Google Wallet platform is that they don’t require consumers and merchants to buy and install NFC-enabled equipment. Nevertheless, Nayar says PayPal is still “keeping an eye” on the technology, having enabled phone-to-phone PayPal payments on Google’s Android operating system
“We’re not asking anyone to do anything different. There simply aren’t that many NFC enabled phones out there and we don’t see NFC as something that will happen very quickly,” he says.
Nayar’s comments are the latest in a growing number of negative forecasts from non NFC-based rivals. Square COO, Keith Rabois, claimed last month that the technology holds no value for consumers or businesses and is only useful for firms that want to track consumer behaviour, adding: “I’ve never met a single merchant in the US who says I want NFC”. Despite the rumblings, a raft of firms are readying NFC-based services as the mobile payments market appears as if it is set to live up to its promise. Google is aiming to gain a foothold in the market with its mobile wallet platform, which includes its daily deals service, Google Offers, while US operators are hoping their joint venture, Isis, will gain traction after inking partnerships with major credit card companies and mobile manufacturers.
PayPal is itself making inroads into mobile payments, adding features including allowing merchants to offer location-based deals, mobile payments and loyalty programmes through its updated platform. PayPal said in June that it is already processing USD10m worth of mobile payments per day and expects to pull in some USD3bn in revenue this year.
Overall, NFC is expected to gain mass adoption, with one in five smartphones expected to be NFC-enabled by 2014 as more and more services launch, according to Juniper Research.
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