10 February 2016

PayPal boss Marcus softens stance on NFC but insists BLE will win out

23 April 2014  |  9037 views  |  5 David Marcus PayPal CEO

PayPal chief David Marcus says that the rise of host card emulation has forced him to reevaluate his long-held scepticism about mobile NFC payments, but he still feels bluetooth low energy will be the technology the revolutionises the way we pay.

In its quest to conquer the high street, PayPal has consistently ignored NFC. Back in 2012 Marcus asked: "Is tapping a phone on a terminal any easier than swiping a credit card? 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."

In a new blog post Marcus says that another major problem with NFC has been the Secure Element and the way in which different players in the ecosystem have fought over who controls it.

The rise of HCE, thanks to support from Google, Visa and MasterCard has helped to solve this problem and "for the first time ever, I saw a glimmer of hope for NFC in some shopping configurations," he writes.

By "shopping configurations" the PayPal president means when shoppers have to pay at specific locations within stores, such as at supermarkets. He makes clear though that, generally, shoppers should "be able to grab what we want and go" and that this is where BLE Beacons beat NFC.

"The bottom line is that I'm moving from being a massive skeptic of NFC, to being cautiously optimistic on NFC HCE take-up in very specific shopping use cases. But I still passionately believe that paying hands-free through a BLE Beacon and notifying the merchant you're in the store through that method will enable more transformative experiences for consumers and retailers alike," concludes Marcus.


Comments: (5)

Alexander Peschkoff - TEDIPAY - London | 23 April, 2014, 11:16

It's not "either or". It's both, and more (QR and WiFi Direct, for example, have a lot to offer too - especially from the omnichannel perspective...)

The problem is not (just) with the technology, but with value proposition for all the players.

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Tony Wenzel - Strata Insights - New York | 23 April, 2014, 16:06

Payment is only one element of the value of these technologies to retailers.  The ability to deliver, collect, manage, analyze, and report information and media is very powerful.  I suggest that these capabilities will have as much bearing on their adoption as their payment abilities. 

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Maarten Bron - UL - Leiden | 24 April, 2014, 06:33

You're right Alexander, in my view BLE should be positioned to provide for a better NFC commerce experience - one should not be seen without the other

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Aneet Morar - American Express - London | 24 April, 2014, 09:02

While I agree with Alexander, one also needs to keep in mind the fact that PayPal's challenge with in-store payments is merchant coverage. 

So their position has to be biased towards technologies which may enable them to compete with the coverage networks currently have via POS/contactless POS.
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Gregg Weintraub - State Street IMS - Princeton | 28 April, 2014, 17:52

Won't retailers at physical locations want to recreate the online shopping experience to the extent that they can?  Won't they want to know what was placed in a shopping cart and then removed before checkout?  Wouldn't the path through the store be of value?  I think these may well be better determinants of the payment methods they will accept than just looking at the payment method in isolation.

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