PayPal to offer NFC payments on Android this summer

PayPal jumped into the Near Field Communication game with a new peer-to-peer mobile payment service that will initially work on Android phones.

Click here to watch a video about PayPal's new NFC payment system.

The NFC-enabled widget for Android, which will be available later this summer, lets two users "bump" their phones together to transfer funds. The company's demonstration of the service at the MobileBeat 2011 conference featured two Nexus S phones, the same model used by Google (NASDAQ:GOOG) in its Google Wallet demonstration last month and one of the few phones currently able to support NFC technology. The Nokia N9 and the BlackBerry Bold 9900, available in September, also support NFC technology.

Laura Chambers, senior director for PayPal Mobile, wrote on the PayPal blog, "We've been looking at NFC technology for a while and we saw a tremendous opportunity to combine the best of NFC and the best of PayPal."

PayPal's app for Android faces competition from Google Wallet, which aligns Google with Sprint Nextel (NYSE:S) and financial services providers MasterCard, Citi and First Data. Google Wallet allows users to pay for goods and use coupons using Android-enabled phones. Also a competitor: Isis, the joint venture from Verizon Wireless (NYSE:VZ), AT&T (NYSE:T) and T-Mobile USA. Isis plans to roll out contactless payments at select merchants in Salt Lake City, Utah and Austin next year.

Last week, PayPal reported that it saw $10 million in mobile total payment volume a day, up from $6 million in March. In addition, Juniper Research forecasted that NFC-enabled contactless transactions will triple to $670 billion in 2015.

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