Google and PayPal are confident mobile payments will take off this year and beyond as more mobile phones become equipped with NFC capabilities.
from both Google and PayPal are extremely bullish on mobile payments enabled
with near-field communication technology.
Executive Chairman Eric Schmidt said
he expects that a third of checkout
terminals in retail stores and restaurants will be upgraded to allow NFC mobile
payments from mobile phones within the next year.
that based on how long I think it takes, because the terminals are available
now, the software is available now or this summer," Schmidt said at the
Cannes Lions ad festival last week. He noted that several other vendors, such
as Research In Motion, LG, Sony Ericsson and Apple, would soon sell phones with NFC chips.
Google Wallet would work on these phones.
Schmidt is waxing
bullish with great purpose: Google has a huge horse in this mobile-payments
game. The company last month introduced
Google Wallet, a mobile-payment
service launching soon in New York and San Francisco.
specifically includes a free mobile application that will let owners of Samsung
Nexus S 4G smartphones from Sprint use their phone as a wallet at some 20
retailers and restaurants. Users tap their phones to a point-of-sale system
made to pay for goods. Google Offers
, the new local deals service, is
being used as the hook to get consumers using Wallet.
enabled by NFC technology, a short-range wireless technology that allows
communications between sensors brought within close proximity. The technology
has been widely adopted in Japan, with over 70 million phones equipped with NFC
chips necessary to enable mobile transactions.
it is testing NFC base stations in Japan
that let consumers tap the base station with their NFC-enabled phone to leave a
rating or review for the place where the station is located. Google will also
recommend other places consumers might like.
couldn't do this in the U.S. because there is a paucity of NFC supporters, which
is one of the challenges Wallet will face when it launches.
in this game, PayPal, is also a fan of mobile payments. Laura Chambers, senior
director of PayPal Mobile, said the payments arm of eBay is logging up to $10
million in mobile payments a day and now projects $3 billion in mobile-payment
transactions for the year.
payments are growing at a rate we never could have imagined when we started
processing them back in 2006," Chambers said
. "We first predicted $1.5 billion in
2011 mobile-payments volume. At our analyst day in February, we upped that to
$2 billion, and just a few months later, we have now added another billion to
PayPal currently sees 8 million customers regularly making purchases on their
mobile phones, up from a previously reported 6 million users.
and PayPal Mobile have different approaches honed by great brands. PayPal's
mobile payments are organic, as the company is associated with virtually every
major financial-service player.
trying to win the hands of retailers, local merchants and, eventually,
consumers. Both companies appear poised for a long, drawn-out battle.