PayPal pushing mobile payments forward on Android

New NFC-enabled widget lets users send and receive payments with a simple bump

You hear that sizzling? That’s the sound of NFC getting hot, hot, hot.

Online payments site PayPal announced Wednesday a new NFC-enabled Android widget that makes paying somebody as easy as tapping your phones together.

Maybe you’ve used Bump to exchange business contacts? It’s like that, except with money.

Laura Chambers, senior director for PayPal Mobile, demoed the new service today with Nexus S phones. As you can see in the video embedded below, it’s really meant to work as simple as tapping two phones together. Either user can request or send money to the other participant in the transaction.  

Chambers says the feature will be made available by late summer.

The Nexus S has been getting a lot of NFC payments love recently. In May, when Google announced its mobile payments application Google Wallet, the Nexus S had exclusive rights to the app. It will be interesting to see how Apple reacts to all these advances in mobile payments: will the iPhone 4 support NFC?

(If you recall, the Nexus S is the successor to the Nexus One, the first Google-designed and branded phone. While the Nexus One was manufactured by HTC, the Nexus S was done by Samsung.)

It makes so much sense for PayPal to be developing this new feature, as it’s right up their alley. And, besides, the mobile payments space is already paying off big time.

The latest data suggests that the total value of mobile payments for digital and physical goods, money transfers and NFC (near-field communications) transactions will reach $670 billion by 2015 (Juniper Research). Another group projects mobile payments at $984 billion in 2014 (Yankee Group).

Stepping away from the analysts’ estimates and back to reality, the industry is still incredibly strong. PayPal plans to handle a total of $3 billion in mobile payments volume this year, meaning the company would single-handedly be responsiple for half of all mobile payments.

With today’s announcement, PayPal just tightened its control of mobile payments on Android.