PayPal unveils NFC 'bump' payments

Only for US-based Samsung Nexus S owners, but you gotta start somewhere.

The new feature works in tandem with PayPal widget that lets a user to request or send money. The user enters the transaction information and then taps their phone up against a similarly equipped NFC phone.

The process is completed with a PIN number entry.

Apparently, the transactions are carried out via an encrypted token rather than the secure element inside the NFC chip. And they're set up just for peer to peer transactions at present, rather than merchant payments.

PayPal already has form in this area having trialed a similar service with Bump, although the NFC process takes fewer steps and doesn't require both parties to launch their apps.

However, at least Bump can run on any smartphone. NFC is still only available on one phone in the US.

Shimone Samuel, product experience manager for PayPal Mobile, however, said: “What I’m looking for is what is simplest and easiest for customers and NFC is the simplest way to request money."

It will be interesting to see how PayPal extends this functionality to paying merchants. That could represent an extension of PayPal into the physical shopping space.

PayPal expects to transact $3bn on mobile this year; last year, the figure was $700m.

* Interested in the mobile payments space? Download ME's own premium report, Mobile Payments 2011, for an unmissable overview of developments in operator billing, pay-by-mobile, in-app payments, NFC, PayPal on mobile and much more.

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