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“PayPal is definitely headed towards Near Field Communication payments,” Todd Ablowitz, president of Double Diamond Group LLC in Centennial, Colo., tells PaymentsSource.

NFC supports two-way communication with other NFC chips, enabling users to initiate payment but also to download coupons, discounts and rewards for redemption at the point of sale.

In general, the physical world is where PayPal sees its next growth opportunity, Ablowitz says. PayPal wants to give consumers the option to pay for purchases in person from their PayPal account using their mobile phones, he says.

But while consumers may embrace mobile-based payments, PayPal may face opposition from merchants because of its fees, Ablowitz says.

Payments Source, January 20, 2011