Blog Post

The NFC Dance: One Step Closer With PayPal; One Step Further With Square

We are still far from seeing simple, wave-and-pay NFC as a ubiquitous technology for mobile payments, and even further from seeing consumers adopt such services en masse — even if there has been a lot of interest from many handset makers, merchants, carriers and payment providers in getting them to work. Two developments today — one from PayPal, and the other from Square — alternately highlight some of the promises of NFC, but also how you can still make a lot of advancements without it.

PayPal, the payments company owned by eBay (NSDQ: EBAY), has largely focused its attention up to now on mobile transactions made via the web or in apps: that is the basis for much of PayPal’s business today both online and in mobile, where the service is used for transferring money as well as paying for goods and services.

But a new “Shopping Showcase” set up by the company in New York, highlighting the use of PayPal in retail situations, points to where PayPal hopes to potentially play more in the future.

In a blog post on the installation, PayPal notes that it will show off its version of a digital wallet, where a user can keep electronic versions of loyalty cards and different payment methods in one place.

As GigaOm points out, one feature of that digital wallet will be a “tap phone” option to enable NFC payments.

This is not PayPal’s first demo of NFC on its platform. Back in July, the company showed off a service for NFC-equipped Android devices to transfer money to each other.

Neither of these demonstrations are firm commitments to NFC, but they are some of the first signs that this very large payments company will be getting behind the technology when and if it does start to become mainstream in devices.

Not so for a service out today from the mobile payments startup Square. Today the company — which first made its name with a square-shaped dongle used to make and take payments with Android and iOS devices — launched an updated verison of Card Case for iOS and Android, making it a contactless payment service that doesn’t go anywhere near NFC technology to work.

Card Case is a service that was first unveiled earlier this year as a way for users to store loyalty cards for different merchants within the Square app, as well as payment cards, and make payments (which it called “tabs”) at individual merchants that have signed up for the service.

Today’s development sees the service now working with geofencing technology. Now, when a user is within 100 meters of a participating merchant, and a user has enabled the app to work with that merchant (by indicating to “auto open” the tab), a user now only needs to give his or her name to process a payment, without taking out the device. The merchant, meanwhile, confirms the identity of a user based on a photo before approving the purchase.

There are now 20,000 merchants signed up to the Card Case service, out of the 800,000 merchants that have activated Square so far, according to this article in TechCrunch. A new service will also see the app directing users to the most popular Card Case retailers — a bit of promotion that might lead to more shops signing up for the service.