While 2011 was a big hype year for NFC payments, 2012 may see the technology challenged by cloud-based solutions that use existing mobile infrastructure, according to Mobile Commerce Daily.

So far 2012 has been somewhat of a down year for NFC – particularly thanks to Google Wallet’s recent security woes. Meanwhile, PayPal has made its move into the m-payments arena, offering cloud-based services in a couple of major U.S. retail chains.

“There is momentum behind cloud-based solutions,” Lara Albert, senior director of global marketing at Globys, told MCD. “I think people are realizing that there are alternatives to waiting for NFC and Secure Element chips to be embedded in all of the mobile phones.”

“Then again, let’s face it, if or when Apple’s next iPhone contains an NFC chip in it, the whole game changes.”

Until that day comes, the wait for NFC may prompt consumers and merchants to look elsewhere. As MCD observes, Google Wallet, security concerns aside, is dealing with limited availability on just a couple of handsets. Isis, the other major U.S. NFC payments player, won’t really see any action until April when the service goes live in Salt Lake City and Austin.

That being said, Google has already built up a strong network of acceptance points through a variety of merchants, restaurants and transit operators.

“Google knew they could not control too much of the handset stuff right now but they could be smart about getting the right retail partners, which they have done,” Mark Beccue, senior analyst at ABI Research, told MCD. “Most consumers are going to run across a CVS, Walgreens or Subway as they go about their day – that was a good strategy.”

According to Beccue, PayPal’s challenge will be its dependence on the quality of the mobile network where it is being used. A bad connection or slow network, such as in a rural area, could make for a problematic payment experience.

“PayPal has some momentum,” commented Beccue. “What will be interesting is if, over a 6 month period, to see what the market acceptance is. If it does not work fast, that will be the determining factor.”

Get the full story here.