Apple’s failure to integrate NFC into its iPhone models has held back the adoption of mobile payment services. However, its decline has opened the opportunity for further innovation in the mobile commerce sector.

The company has recently integrated iBeacon into iOS 7. The accommodation of the software seems to confirm Apple’s desire to use alternative technology to NFC for a range of services, including payment transfers. iBeacon uses Bluetooth Low Energy (BLE) and offers the opportunity for brands to locate a user within a given location and send/receive data from a user. The software does not require any additional hardware to be integrated within handsets and is more cost effective for retailers [see here].

The potential of Beacon within the mobile payments sector has garnered further gravitas with PayPal’s decision to incorporate the technology within the latest versions of its mobile apps. The company uses the technology to let customers check into retail stores and pay via verbal consent: when a use checks into a participating store, Beacon delivers a vibration or sound to confirm a check-in with a user’s details and photo appearing on a point-of-sale screen. A consumer then only has to agree to a sale.

The integration of the service is a continuation of PayPal’s desire to lead the mobile payments field. In the US, the company has rolled out its mobile payment system, whereby users can assign their account to a mobile device, to 18,000 retail locations. Its parent company eBay has also agreed a deal to purchase competitor Braintree in a bid to strengthen PayPal’s mobile efforts.

Google too has turned to Beacon technology in its Android operating system. This further comes as a blow to NFC, which has long been supported by Google. Nevertheless, Google’s adoption shows the world’s largest tech firms are increasingly seeing Beacons as the future when it comes to mobile payments.

Posted October 8, 2013

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