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he company said it is now on pace to do $3 billion in mobile payments this year though much of that is person-to-person transfers using the PayPal app, which don’t yield much revenue for PayPal. Users do not have to pay a transaction fee when payments pull from bank accounts or an existing PayPal balance.

In many ways, this is similar to personal transfers PayPal has previously enabled through its mobile app using Bump Technologies. Users are able to send money back and forth by bumping their phones together, a solution that doesn’t rely on NFC. It’s unclear how much of that may have happened through bump payments, so I don’t know how significant person-to-person NFC payments will be. It’s nice to be able to make a payment to someone by just touching phones but, again, it’s not like many PayPal users don’t have that ability now.

Shimone Samuel, Product Experience Manager for PayPal Mobile, however, said the NFC solution has fewer steps than bump payments and can be activated even when only one person has launched their widget. Bump payments require both people to have their PayPal mobile app open. He said PayPal turned to NFC because it simplifies P2P payments.

“What I’m looking for is what is simplest and easiest for customers and NFC is the simplest way to request money,” he said.

The bigger opportunity is in enabling real-world payments as retail and local merchants, something PayPal is still set to unveil later this year. That will be a much bigger deal because it will signal how PayPal will counter moves by Google and its NFC payments initiative, as well as other challengers like Square and the carrier consortium, Isis project. Samuel declined to comment on how PayPal will use NFC specifically at point of sale but he said the company takes every opportunity to learn from its products.

PayPal needs to figure out how to tap that market for offline purchases, which is much bigger than than pure online transactions where it’s excelled. So it’s nice that PayPal has enabled some P2P NFC payments, and it’s showing that it’s getting up to speed on NFC. But we’re still waiting to see the real fireworks.

Listrak sampled Internet Retailer's Top 1000 online retailers, loading up carts and then abandoning them ("Hey you kids! Knock it off!") to see who would follow up. Only 14.6% sent a follow-up email, and fewer still sent a second or third email which, Listrak's CEO Ross Kramer told Internet Retailer, is where about half of the revenue comes from. Among Listrak's suggestions to retailers: get the shopper's email address first.

Intuit cuts payment rate for AT&T subscribers Intuit announced a partnership with AT&T for its GoPayment mobile payment solution, which competes with Square. Like Square, Intuit offers a free card-swiping attachment that plugs into the audio jack of an iPhone, iPad, Android or Blackberry device, allowing anyone to collect credit card payments. Intuit's basic rate of 2.7% slightly undercuts Square's 2.75%, but AT&T customers will pay even less (1.7%). Intuit originally charged customers $175 for the swiper dongle, but last January, in a bid to compete with Square, it began offering the dongle for free. Still, Intuit has struggled to gain the visibility that Square founder Jack Dorsey and COO Keith Rabois and high-profile investors like Richard Branson have brought to Square. This week's deal with AT&T is a reminder that Intuit is serious about GoPayment, which may actually offer more to merchants since it integrates with QuickBooks, its bookkeeping package that also targets small businesses.

PayPal embraces NFC (just a little) PayPal has made something of a point of not jumping on the NFC bandwagon, emphasizing the technology-agnostic nature of its mobile payments platform. Demonstrations at PayPal's recent Innovate conference emphasized payment options like PayPal's Empty Hand system, which lets you buy things with only your mobile number and a PIN. Still, NFC seems an inevitable part of the payments picture in the years ahead, and this week, PayPal delivered the peer-to-peer NFC payment technology that it promised last July. Shimone Samuel, Product Experience Manager for PayPal Mobile Applications, wrote on the PayPal blog that the technology for NFC P2P is included in version 3.0 of PayPal's Android app. No need for it in the iOS app yet, obviously, since the most recent iPhone upgrade disappointingly didn't include support for NFC. As we noted back in July, in practice, the transfer of funds through PayPal's NFC system isn't substantially different from what was already possible using Bump, which sends the transfer through servers in the cloud rather than wirelessly between the mobiles. But the NFC system will let PayPal developers acquire experience with NFC wireless transfers, which should serve them well as NFC-enabled point-of-sale terminals begin to show up next year and beyond.

The updated Android app also includes a few non-NFC features, including a newly redesigned landing screen, auto-complete from your phone’s address book and other UI improvements

2012 will be the year of "NFC training wheels."

NFC smartphones will outnumber deployment targets.

Carriers will deploy NFC faster than consortiums.

In a video provided by PayPal, it shows how users will be able to walk into a store and check in to a location to unlock discounts and coupons. When a consumer goes to check out, he’ll be able to pay by entering his phone number. That leverages eBay’s purchase of Zong and its carrier billing capabilities, though it’s not clear how much easier or more convenient that is for consumers who pay with a credit card swipe. But it does open up the option to use carrier billing for physical goods in-store, which is good for people without a card, though the question of how large the transactions fees will be is important. Right now, carrier billing fees are still much higher than credit card fees, which might deter some merchants.

Users will also be able to scan items in-store and pay for them with PayPal without having to get in line. Customers can just flash their phone to an employee who will confirm the purchase. This is very much like AisleBuyer and it sounds like PayPal is looking to bring this to restaurant bills as well, something Thompson hinted at in his blog post. This is a cool step that makes sense for people who want to get in and out quickly.

Customers will be able to apparently pay ahead for coffee ahead of time and pick it up. Users will also be able to choose how they pay for something after the purchase with PayPal Credit, which seems to leverage eBay’s BillMeLater. All of this appears to work through PayPal’s mobile application and doesn’t seem to require any new investments by merchants. That’s a big concern for mobile payments built on near field communication, which requires many businesses to upgrade their point-of-sale terminals to handle contactless payments.

The new mobile payment tools don’t appear to include NFC payments. PayPal recently introduced person-to-person payments using NFC on Android devices, but the company told me at the time it was just focusing NFC on P2P payments. It sounds like PayPal is trying to work around the hardware constraints of NFC payments at point of sale.

Other shopping features on display included the ability to get push notifications for discounts that can be shared, which appears to build off eBay’s acquisition of WHERE. Consumers will also be able to scan an item in store and find inventory at other locations, something eBay got from its RedLaser and Milo pick-ups.

It’s unclear how soon all of this will come together and how many merchants will sign on. But providing a complete service for retailers and businesses to not only push out offers and discounts but also complete the transactions makes sense. Merchants can close the loop on transactions and understand how their marketing is doing. This is essentially what Google is trying to do with Google Wallet and Offers though it’s focusing primarily on facilitating targeted marketing, rather than taking a cut of transactions.

PayPal’s payment initiative is part of eBay’s broader commerce platform called X.commerce, which it’s building off the acquisition of Magento.

But there’s also a lot of questions to be answered. For instance, will consumers find this more convenient than a card swipe? Will PayPal make it any easier for people to set-up and manage accounts? Do all of these parts work well together in one solution? And how aggressive will PayPal be in selling this to merchants and consumers? I’ll be interested to hear more and I think PayPal can be a big contender if it gets its execution right. This is going to be a big market but it will require not only great tools but a lot of smart selling to consumers and merchants.

Requests for money work the same way. You can choose to ask in person, which creates a QR code, or you can send a request to one of your contacts. Again, SMS and email-based requests appear to be coming at a later time.

To withdraw, you can do immediate transfers to your PayPal, or a bank transfer in 2-3 days. Obviously, if you’re using PayPal, you’re going to get a fee tacked onto transactions. Bank transfers might have them as well, depending on your particular bank’s methods.

We do know that there’s an API in the works, which will bring payment options to more apps and websites.

“…it’s not about what you can’t do with PayPal but rather what you don’t do with PayPal.  Over the past decade, PayPal has done a great job transforming how people think about payments, but most PayPal users don’t routinely use the service to pay each other for lunch, drinks, etc. from their mobile phone.”

Presently Clover is sitting on a $5.5 million investment from Andreesen Horowitz, Sutter Hill Ventures and Morado Venture Partners.

If PayPal tracks the data on peer-to-peer for trends (location, time of day, how much is being transferred, how far away are they) then the NFC rollout could be the first steps to tracking where, when and how to implement a possible NFC solution for smartphones.

We can imagine a dozen scenarios where independent merchants could use NFC payments. It comes back down to our well-worn farmer's market scenario - a farmer could use a NFC phone to accept PayPal payments from other PayPal Android users with NFC. While that seems cool, think of the limiting factors - both parties need NFC, Android, PayPal and a desire to do business. Finding two matching parties with those particular attributes right now is a niche within a niche.

The GSMA has published interoperability standards for SIM-based NFC application programming interfaces (APIs) and protocols based on the Pay-Buy-Mobile specification for secure NFC mobile payments. Such standards pave the way for the development of contactless services across a variety of devices irrespective of their operating system (OS) while providing more detailed implementation protocols for the Java and Android platforms.

IHS Screen Digest research indicates that the 45 operators involved in the announcement serve 50.7 per cent of the world's mobile subscriptions. Since the NFC module is embedded in the SIM card, the operators expect users to be able to use existing handsets for contactless services without the need to switch to a high-end smartphone. Users of smartphones currently lacking NFC capabilities will also benefit from this technology.

The 45 operators involved account for nearly 3 billion subscriptions worldwide, and include China Mobile, Vodafone Group, América Móvil, Telefónica Group, China Unicom, Axiata, Bharti Airtel, Deutsche Telekom, Verizon Wireless, and AT&T.

There is also the issue of cost. IHS Screen Digest estimates current SIM-based NFC modules to be a hundred times more expensive than traditional SIM cards. This would deter most operators from venturing into offering SIM-based NFC as an option to customers in emerging economies until economies of scale bring the associated costs down.

It is unlikely that operators will allow third-party "over-the-top" services outside of their value chain. As the implementation of some contactless services (e.g. mobile payments, public transit) depends on a close collaboration between operators and local third-parties, it is expectable that contactless services deployments and uptake will vary greatly across markets.

IHS Screen Digest does not foresee rapid adoption of SIM-based NFC mobile payments. Users will likely become acquainted with the contactless technology by way of other use-cases, as NFC experiences in Asia and Europe suggest--most notably the Octopus transit and stored-value card in Hong Kong, and the London Oyster transit card.

If NFC payment and transit cards schemes prove successful in more locations, the likelihood that such services will be increasingly incorporated into mobile devices will also increase.

Once the customer has selected an account to both receive and make payments from, Commbank Kaching will enable them to pay anyone via MasterCard PayPass, an email address, phone number or Facebook friendship.

Depending on the format selected for payment, the transaction will either take place instantly, or generate a unique code for delivery to the recipient, allowing them to access their payment online at a convenient time.

Users wishing to activate the NFC functionality will need to use an iCarte cover - billed as an interim technology by the bank - which is available for purchase during the app installation process.

"Mobile and online social payment is the next step in transaction technology," says Lindberg.

Now, for the first time, Australian consumers will no longer have to rely on cash or cards to make payments to family, friends or even businesses.