Paypal is testing mobile payments in Sweden using using NFC (Near Field Communications) stickers. Paypal is testing the system using both Android and iPhones, and their goal is to deploy the system next year with several retailers. Two vital components to any mobile payment system is that it must be safe and easy to use. There will be another real challenge for anyone wishing to push a new payment system--it must be ubiquitous.
The fact that Paypal allows web developers to access their API and build applications with their systems, helps the company achieve that ubiquity. Mobile payments, however, will not be a battle easily won, but the potential and consumer desire is clear and present.