Mobile commerce is beginning to take hold with consumers, but as more companies look to establish themselves in the emerging industry, one of the major contenders is deciding to bow out of the competition. PayPal has decided to discontinue its pursuit of NFC mobile payment applications, claiming that the technology is a step backward for point of sale transactions. The company is not abandoning mobile commerce entirely, however, and will be working on a new way to provide a similar service to tech-savvy consumers.
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PayPal first began experimenting with NFC technology in July of last year by launching a mobile payment application for Android mobile devices. The experiment ended in Sweden in December, when PayPal concluded that the retail industry was not investing enough into installing the NFC-enabled terminals that would make mobile commerce take off. As such, the company has decided to remove NFC technology from the equation and will instead begin experimenting with a new system that allows PayPal users to connect their accounts directly to their phones.
The company claims that this service will be more intuitive for both consumers and retailers. Retail companies will be able to incorporate the software provided by PayPal easily enough and this will allow consumers to make transactions with their smart phones. PayPal will also send a credit card linked to their account so that consumers can pay for goods at stores that do not have the system in place. PayPal believes that this method of mobile payment will outpace NFC technology and become the preferred focus of the mobile commerce industry.