Did PayPal Just Kill NFC?

September 11, 2013         By: Jason Mongiello

With many wondering exactly when the tipping point of mass NFC adoption would come, it might now be time to wake up from the tap-and-go dream.

PayPal has announced the development of Beacon, a gadget that adds on to supported point-of-sale systems. It’s about the size of a USB drive and plugs into electrical sockets.

Beacon would be placed at the entrances of retail locations and automatically recognize PayPal users through communicating with these customers’ mobile devices. The merchant will be sent a photo and the name of each person who walks into their store so they can greet them personally.

Shoppers don’t need to whip out their phones to start up the PayPal app or even check in to the store. When a customer is done shopping, they get rung up at the checkout counter, confirm that they are paying with PayPal, and agree to the amount. No card swipes, no phone bumps, no fumbling for exact change.

As for security measures, according to a PayPal spokesperson, “the merchant uses the photo (that pops up on the POS) to ensure that the customer is who they say they are,” and “if their phone is stolen and used for purchases our automated fraud and risk management algorithms will kick in if the purchases are out of the ordinary.”

PayPal will allow developers to access the API on a case by case basis. PayPal will choose the best ideas that developers put forth in an effort to work “with developers and retailers to create shopping experiences that save time or save money for the consumer.”

Some ideas being thrown around include self-checkout with the PayPal app and having an interactive map of sale items in stores.

Apple’s coincidentally named (or is it?)  iBeacon is also based on Bluetooth Low Energy tech. Though it isn’t solid proof that Apple is entering the payments game, it’s clear that tech giants are moving away from NFC and finding BLE to be a possible answer to the mobile payments question.