PayPal Demos Android-Based NFC Mobile Payment System

Paypal Nfc Widget

There aren’t a lot of phones on the market which can serve as digital currency, but PayPal demonstrated Wednesday how its users will be able to make payments to each other with their NFC-equipped phones through a new Android widget.

Remember back in the days of the Palm (NYSE: HPQ) Pilot, when you could beam your business card info to another user simply by holding the two devices within a few inches of each other? That’s exactly what PayPal is proposing for making payments with NFC phones, it said in a blog post Wednesday. Simply activate the widget on a phone with the short-range wireless technology and hold it very close to the phone of the person receiving the payment. When you hear the buzz, you’ll know your bank account has gotten lighter.

NFC-equipped phones are few and far between at the moment, but several different companies have either declared plans to embed the technology in upcoming devices (Research in Motion (NSDQ: RIMM), for one) and others (like Apple) are believed to be evaluating the technology. Google (NSDQ: GOOG) has been pushing NFC payments hard as part of its Android platform, unveiling Google Wallet in May as a payment service for phones inside of retail stores that use Mastercard’s Paypass system.

PayPal’s service is a little different, more akin to what Square has been doing making iPhone credit card readers that let almost anyone accept credit cards, but a little more lightweight since it doesn’t involve extra hardware or software. An Android widget is a limited piece of software that’s not quite an app, but gives you a quick window into a proper application or lets you do a few limited things.

Here’s a video produced by PayPal explaining its system:


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