PayPal NFC person to person payments widget for Android announced

PayPal announced NFC person to person payments / money transfers widget for Android, to run on the Nexus S, today at Mobile beat 2011

Paypal has unveiled its first foray into NFC today by showing off its new NFC person to person payments Android widget that currently works with the Google Nexus S. Laura Chambers, senior director of PayPal Mobile, introduced the new Android NFC person to person payments widget that allows consumers to transfer money by simply tapping their NFC phones together. Being NFC, Android users will not have to open a PayPal app to transfer monies, they simply tap a payment request into the widget and tap their phones together.

PayPal NFC person to person payments process couldn’t be simpler

PayPal has worked hard to create a frictionless experience for the consumer who will use their NFC person to person payments widget, and whereas there are a couple of security concerns, the process looks very easy. Android users can either request to pay or receive funds from another NFC-enabled device that is using the PayPal NFC person to person payments widget. As soon as the request is sent to PayPal, you simply hold your phones together until your NFC phone buzzes and you are done. Your transaction is complete and you can go about your business. One of the great abilities of the NFC standard is the feature of peer to peer data exchange. We get a first look at how this can be implemented with the PayPal NFC person to person payments widget that utilizes the NFC peer to peer functionality to complete its transactions.

PayPal NFC person to person payments do not use the secure element

The secure element on many NFC phones is an area of the phone dedicated to storing delicate data in a tamper proof area of the phone that is segregated from the phones OS. That portion of the NFC phone ensures you have your data and that is not sitting in a database on the internet that you need tokens or credentials to access. The other way to use NFC is without an secure element and is that you store nothing but a secure encrypted token on your phone which acts like a username and password on a web-based payment system which is then secured with a pin number. There is a lot of conjecture about which system is secure at this time, but PayPal has chosen to bypass the secure element and to rely on its own web based security with its new NFC person to person payments widget for Android. Security will be an issue that is debated further with this widget and we will go into that in another post.

PayPal has been working on its NFC person to person payments widget for a few months now, testing it with the Nexus S and older Nokia NFC phones. We have known for sometime that PayPal has been eying NFC and plotting to grow its full suite of services with NFC resulting in a PayPal mobile wallet platform. We also expect the PayPal NFC foray to expand into brick and mortar stores with NFC POS terminals that support PayPal NFC payments, but as yet there have been no official announcements.

What we don’t know about the PayPal NFC person to person payments widget

The announcement of the PayPal NFC person to person payments widget is a big step for NFC. It will likely be the first commercially available NFC peer to peer payments system to hit the market here in the US. However there are questions unanswered. At this time we have no idea when the widget will be available to Nexus S owners, the company has stated summer 2011 but has not given a firm date. There has also been no word on fees associated with the service which will either make or break the utilization of the widget. You can see in the video below how a transaction occurs, but we bet many people will want to know apart from a pin number, what other security features are in place to prevent somebody draining your account if they get hold of your phone. As it is PayPal who is deploying this technology we are sure there are other security measures, but there is no firm information in the public domain at this time. To our mind this PayPal NFC person to person payments widget seems like it would work great with an NFC sticker on any Android phone that runs Gingerbread or above, but nothing has been announced about the possibility of an NFC sticker.

We will keep you updated about any other NFC announcements that the company makes, but in the mean time check out the PayPal NFC person to person payments video below.