09 February 2016

PayPal forecasts an NFC-free revolution on the high street

18 December 2012  |  12441 views  |  4 Shopping mall

PayPal president David Marcus is forecasting a year of disruption in the shopping and payment space in 2013, but insists that NFC technology will not play a part in the upheavals.

Marcus believes that payments at the point-of-sale alone is not a problem that needs to be solved, with NFC falling by the wayside as smarter location-aware and context aware mobile shopping apps come to the fore.

"Is tapping a phone on a terminal any easier than swiping a credit card?" he asks. "I don't think so - it's not solving a real consumer problem and its not providing additional value to encourage me (or anyone else for that matter) to change my behavior."

Instead, the mobile wallet will provide a vehicle for payments to converge with loyalty and rewards, he believes. In this scenario, the payments process is a mere adjunct to the real value in providing consumers with value-added incentives to spend through the delivery of special deals and coupons. Much of this will be achieved through smart GPS systems that feed relevant deals direct to the wallet according to the user's location.

Says Marcus: "I think that location aware, and context-relevant shopping and payments experiences will be one of those technologies that changes much much more for the consumer than even the hard working technologists in Silicon Valley can imagine today."

The bricks and mortar shopping experience will also change, as old school cash registers are replaced by sales assistants wielding mobile and tablet devices.

"In the old retail model, customers browsed in the aisle and paid at the register," says Marcus. "As we move to a world where even the transactions in a shop are transmitted on the back end via the Internet, sales associates will be free to roam the stores and help their customers check out and pay from the aisle or even the changing room… and if they don't have the right size or colour in stock, they'll order it for you on the spot to be delivered direct to your home."

Comments: (4)

A Finextra member | 18 December, 2012, 11:36

I can't help thinking that this is all smoke and hope on the part of PayPal.  

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David Abbott - Fiserv - London | 18 December, 2012, 15:44

With you on this one David....  The NFC hype has now moved onto mobile wallet hype...  Mobile wallets work well closed loop... Most of the EU's internet gambling companies have them tied to web accounts or stand alone... The mobile wallet is just another solution looking for a problem...  wonder what Juniper research will say about an explosion in mobile wallets now?

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Nick Collin - Collin Consulting Ltd - London | 18 December, 2012, 17:45

With both of you on this.  NFC, mobile, it's mostly all hype. 

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A Finextra member | 19 December, 2012, 05:41

Not sure to what extent I can agree with you gentlemen.

While I surely agree that NFC and mobile wallets are around the apex of the hype curve, there certainly is a user experience problem when making an electronic payment.

In my view the question should be "are NFC and mobile wallets the solution to this problem?" - so far, in my real world user experience, I did not find any real improvement against the good old EMV card. The time spent on the POS terminal (even if this is my smartphone) to clear the transaction is still very long.

So the answer is "not yet". There still is a groundbreaking element missing, one that will make a customer willing to switch to the new payment method.

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