NFC = Not For Commerce.
The CEO of PayPal Jon Donohoe was quoted as referring to NFC standing for “Not for Commerce”. If you look further into the PayPal strategy you see that PayPal believe that by the time NFC becomes mainstream for payments we will have moved to a world where we have moved away from point of sale transactions. Their view is that a customer should be able to purchase an item while in the isle or before they have even entered the store.
One of the biggest challenges for mobile payments to become widely adopted is that retailers will need to support the technology to facilitate the transaction. Even though the PayPal model does not utilise NFC and is less complicated for retailers their challenge is still to get merchants on board.
The challenge once you have the retailer on board is to change the consumers behaviour. The consumer is very use to a checkout, the concept of not going to a checkout may be a little harder to change than changing the behaviour of pulling the mobile phone rather than the credit card out of the wallet.
Despite the challenges organisations like PayPal and Square have a real opportunity to provide value added services to their customer through mobile payments long before any NFC enables wallet as they are less complex to implement and can be used by consumers today without the need for an NFC phone or sleeve. The PayPal strategy is going to be an interesting one to follow!