May 12, 2011
PayPal Most Trusted For Mobile Payments
The eBay-owned online payment system PayPal could be set to become even more mainstream as smartphone payment systems gather momentum with Near Field Communications (NFC) in the coming months, Reuters is reporting.
Market research firm GfK suggests that PayPal was the brand most likely to be trusted with personal financial data by consumers in nine major markets around the world, in a survey whose results are due to be published later on Thursday.
"When we think of trust or security, we probably default to a brand that's been around for a long time. In this case, people have put their trust in a very new company," GfK analyst and report author Ryan Garner told Reuters.
"Whilst financial brands have built up high levels of trust, mobile-based brands such as Nokia and Apple, and relatively new financial brands like PayPal, have the potential to disrupt this seemingly comfortable position."
NFC is a short-range wireless protocol that allows a smartphone to transfer a set payment to a cashier or transfer money to another smartphone. Both sides of the transaction must be near each other to be completed and the information is not transmitted beyond the range of a few inches.
Paying for small items like newspapers or a coffee by touching a mobile phone against an NFC reader has been technologically possible for quite a while. However a reluctance to invest in the infrastructure has prevented a market from developing in mature economies as banks, telcos, phone makers and software creators have argued over ownership of the customer.
A single NFC chip on a mobile phone would hold a consumer's financial account information, gift cards, store loyalty cards, and coupon subscriptions. Users may also be able to make online purchases from their phones, Business Week reports. By scanning a movie poster, for instance, a consumer might read reviews and use their smartphone to purchase tickets.
"NFC could displace the cash register," says Charles Walton, chief operating officer for NFC chipmaker Inside Secure. "This is going to come superfast."
Paypal is well poised to mature in consumers eyes and all the players would like a share of NFC payments, which is expected to be $1.13 trillion by the year 2014, according to IE Market Research.
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