Payments require a special PayPal widget, where you choose to either send or receive money. Making that selection and then tapping your phone against another with the same app up and running will send the dollars on their virtual way. Phones buzz when a transaction has been made, then the recipient has to enter a PIN number to confirm they want to send or receive the payment in question.
Currently the service is only available on the Samsung Nexus S, but is expected to become available on other NFC-equipped phones in the future. You can already conduct similar transactions using Bump technology. The Bump application, however, requires both phones to have the application open. NFC payments can be made with the app only open on one handset.
I’m pretty excited about the future of mobile payments, specifically the ability to pay for things like a sandwich at lunch or a drink at my local coffee shop by tapping my phone on something rather than forking over a credit card. Paying friends I think I would still prefer to do with cash, or if I was rocking PayPal I wouldn’t be too inconvenienced to actually type in my friend’s address rather than tapping phones.
What do you think? Could you see yourself using NFC payments between friends using PayPal?