Bloomberg News

EBay’s PayPal Unveils Mobile-Payment System That Uses NFC

July 13, 2011

(Updates with comment from PayPal in fourth paragraph.)

July 13 (Bloomberg) -- EBay Inc.’s PayPal unit unveiled a service that will let users make payments by tapping their mobile devices together, joining rivals in the market for wireless transactions using near field communication technology.

The PayPal mobile application will be available later this summer for Samsung Electronics Co.’s Nexus S phones, based on Google Inc.’s Android operating system. It will be offered more widely as NFC is included in more handsets, Laura Chambers, senior director of PayPal Mobile, said in an interview today.

EBay, the world’s largest online marketplace, joins a growing crowd of companies planning to broaden the availability of payment options via NFC, including handset makers such as Apple Inc. and financial institutions like Visa Inc. As the technology gains traction, consumers may soon be able to pay for goods at a retail store, redeem coupons and split a restaurant bill with the touch of an NFC-equipped mobile phone.

“There’s a lot of technologies evolving around mobile payments, and NFC is just one of those,” Chambers said in a phone interview. “What we’re doing is testing out NFC. We’re getting it into the markets, we’re getting it into the hands of consumers and we’ll see how it goes.”

NFC is a technology that can beam and receive information at short distances. Consumers worldwide will spend almost $50 billion using their mobile phones through NFC technology by 2014, Juniper Research said in a report last month.

EBay’s Acquisitions

EBay is investing in new smartphone services as PayPal, an online-payment processor, faces growing competition. Last year, San Jose, California-based EBay acquired mobile comparison- shopping applications Red Laser and Milo, and on July 7 it agreed to buy closely held mobile-payment provider Zong Inc. for $240 million in cash.

The company now has 8 million users conducting transactions on mobile devices, Chambers said. PayPal’s new NFC feature lets users instantly transfer funds between them by tapping two handsets together.

Apple plans to introduce NFC features in its iPhone and iPad tablet, Richard Doherty, director of consulting firm Envisioneering Group, said in January. Nokia Oyj and its software partner Microsoft Corp. also are working on NFC functionality.

Google kick-started adoption of NFC features last year, with a service called Hotpot in Portland, Oregon. Vendors such as Voodoo Doughnut have put special tags on their doors that can be tapped with an enabled phone to give users access to reviews, menus and directions.

--Editors: Jillian Ward, Lisa Rapaport

To contact the reporter on this story: Douglas Macmillan in New York at

To contact the editor responsible for this story: Tom Giles at

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