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10.11.16

Vodafone, PayPal Team for U.K. Contactless Payments

Shutterstock/TCmakephoto

Shutterstock/TCmakephoto

Vodafone customers in the U.K. now can make NFC payments funded from their PayPal accounts via Android smartphones. A new deal between Vodafone and PayPal enables PayPal to be used as a funding source for transactions made with Vodafone Pay. Previously, the contactless mobile payment service only linked to Mastercard and Visa payment cards. Vodafone Pay can be used to make purchases at more than 400,000 locations throughout the U.K., including transit passes within the Transport for London and National Rail Service networks. A special NFC SIM card enables users to make purchases even when the phone is turned off or out of battery.

The U.K. deal follows similar agreements struck between Vodafone and PayPal in Italy and Spain earlier this year. Along with those three countries, Vodafone Pay also is available in Germany and the Netherlands, but no PayPal support for the service has been announced in either of those markets. The U.K. is in the midst of a mobile payments boom, with £2.1 billion (US$2.6 billion) in mobile contactless spending in July 2016—three times the volume of July 2015, according to the U.K. Cards Association. Nearly 20 percent of all card-funded payments during the month used contactless technology, the group said.

Meanwhile, mobile has become an area of increased emphasis for PayPal. Since offering its first mobile payments service 10 years ago, the company has seen mobile payments volume skyrocket from less than $50 million in 2006, to $66 billion in 2015. Nearly one-third of the 4.6 billion payments made via PayPal last year took place on a mobile device, according to the company.

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