PayPal tests NFC mobile wallet at a couple of Swedish retailers

PayPal tests NFC mobile wallet at a couple of Swedish retailers

We first reported in September about the PayPal NFC mobile wallet called PayPal Instore in Sweden, where the firm got together with startup Accumulate to test out some NFC retail therapy. PayPal have been vocally cautious about NFC payments, NFC mobile wallets and anything else with the “N” word involved. In fact, eBay CEO, John Donahoe, went as far as saying that NFC stands for “not for commerce” earlier this year. Some have gone as far to suggest that PayPal’s opposition is a corporate policy to play down the role NFC is due to pay in payments in the next year or so and more strangely stifle its own NFC mobile wallet efforts. However, that opposition hasn’t stopped PayPal launching an NFC app for peer-to-peer money transfers or from conducting NFC mobile wallet tests in Sweden.

So to say PayPal’s position on NFC is a little confusing is an understatement. PayPal is currently suing Google for the Google Wallet and what it calls industrial secrets with regards to an NFC mobile wallet that it suggests was stolen by Google to build the Google Wallet. What the company is at risk of is convincing consumers that they are not part of the NFC payments field, and by the time they change their mind they may find that other more powerful competitors, like Visa and Apple, have taken their place as brand leaders.

PayPal aren’t alone with this double edge sword though, with Square Pay also seemingly talking themselves into a corner. As we mentioned, PayPal are a little bit of an enigma in NFC because in Verifone’s fourth quarter conference call, Doug Bergeron mentioned that the firm is working with PayPal in regards to their 2012 rollouts, inferring NFC payments. Either one or more departments in PayPal aren’t talking with each other or the firm is intentionally hedging its bets and playing down NFC for its own reasons while it works on its come-to-market strategy. Either way, it’s a dangerous game to play for the online banker.

PayPal NFC mobile wallet is being tested in two Swedish retailers right now

The PayPal NFC mobile wallet test is happening at Alpingaraget, a retailer of ski and sports equipment, and Webhallen, which is an electronics store in Stockholm. Along with the ability to accept NFC mobile wallet payments at the POS terminal level, there is a new accompanying app which PayPal is calling PayPal Instore. The app currently is configured for both Android and iOS phones. As there are limited NFC smartphones about at the moment, PayPal is issuing NFC stickers that stick to the back of smartphones which then enables purchases using a user’s PayPal account directly from inside the store. Like with normal NFC mobile wallet payments, consumers simply wave their phones with the NFC sticker attached and app installed over the NFC POS terminal to make a transaction. The app also handles discount vouchers too, which makes the PayPal app inline with Google Wallet for the most part.

Catrine Rhenberg, PayPal’s Head of Consumer Engagement Marketing in Northern, Central and Eastern Europe, said in the announcement statement, “Considering all new technology being used today and the changing consumer behavior, there is no doubt that retailers need to have a true multichannel strategy.”  Once again, PayPal is veering away from endorsing or giving NFC mobile wallets the official thumbs up. Rhenberg told Mobile Payments Today that Point AB provided the NFC POS terminals who were recently bought by Verifone, which makes us think PayPal is also working with Verifone in the US. We already knew about the Accumulate involvement in the project on the NFC mobile wallet end of things.

It is interesting how a company as large as PayPal is steering away from endorsing a technology that is likely to bring the traditionally online bank into the bricks and mortar world. Although PayPal is playing down NFC, it is obviously gearing up for some large scale NFC mobile wallet programs this next year and it seems odd that swallowing their pride would be part of a winning corporate strategy. For now, PayPal has us stumped with its attitudes towards the NFC mobile wallet that utilize PayPal as a form of payment, but we want to know what you think.