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PayPal Beacon May Revolutionize the Way We Pay
PayPal Beacon May Revolutionize the Way We Pay

By Jennifer LeClaire
September 10, 2013 10:40AM

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With Beacon, PayPal is doing one thing really well -- making it very easy to fulfill a payment through the PayPal back-end infrastructure. œPayPal could become the back-end infrastructure for payments the way Amazon has for logistics, said Gerry Purdy, chief mobile strategist at Compass Intelligence.
 



On the heels of its made over mobile app launch last week, PayPal is making an even stronger push to find a place in the bricks-and-mortar world. It'™s called Beacon -- and the company hopes it will revolutionize the way we pay for goods and services by taking the credit card "œswipe" out of the equation.

Beacon is a new add-on technology for merchants that makes it possible for consumers to pay at their favorite stores completely hands-free. Consumers will have full control of stores they will want to check in to (a la Foursquare), those where they will want to get prompted for payment confirmation, and those stores where they will want to enable complete hands-free experiences.

Here's how it works: If you enable hands-free payments, walking into a store will trigger a vibration or sound to confirm a successful check in, your photo will then appear on the screen of the point-of-sale system so you can be greeted by name. Paying only requires a verbal confirmation. No credit card swiping or even touching your phone.

What About Privacy?

"We challenged ourselves to find a better experience than swiping a credit card. And that's hard. No one wakes up in the morning and thinks, 'I wish someone invented something better than swiping a card to pay. I hate it,'" said David Marcus, president of PayPal, explaining how the company came up with the idea for Beacon.

"œWe figured the only better way to pay would be to do nothing. Just walk in a store, and, like magic, when you'™re ready to pay, money is transferred securely. We played with geo-location leveraging GPS and WiFi. We played with geo-fences in iOS. But, none of these solutions met our standards," he said.

Any store running point-of-sale systems compatible with PayPal, including Booker, Erply, Leaf, Leapset, Micros, NCR, PayPal Here, Revel, ShopKeep, TouchBistro and Vend, will plug a PayPal Beacon device into a power outlet in its store. Once the Beacon is plugged in, Marcus explained, the store will be ready to host a personal shopping experience.

Marcus worked to head off any privacy concerns by noting that Beacon won'™t constantly track your location like other technologies. If you enter a store and decline to check in, or just ignore the prompt entirely, he said, no information is transmitted to PayPal or the merchant.

Amazon-Like Infrastructure

We asked Gerry Purdy, chief mobile strategist at Compass Intelligence, about PayPal's latest innovation. He told us this is the next step for the payments processor, which started out as a way to guarantee eBay users would receive the goods they purchased and has evolved over time.

For example, PayPal has waxed aggressive over the past year with web developers, making it as simple as possible to integrate Pay by PayPal into sites. PayPal also charges lower credit card processing fees than traditional gateway providers, which has helped it proliferate in the online payments world.

"œPayPal could become the back-end infrastructure for payments the way Amazon has for logistics. The other side is that this is cool but you also have to be practical. Some people will walk in the store and they don't have the PayPal app. So they have to take time to download it if they want to engage," Purdy said.

œ"Of course, if someone walks in and doesn'™t have a smartphone or doesn't want to use the PayPal app he can still buy the traditional way. PayPal is doing one thing really well -- making it very easy to fulfill a payment through the PayPal back-end infrastructure and this is another example of that," he said.
 

Tell Us What You Think
Comment:

Name:

Oliver Beaty:

Posted: 2013-09-11 @ 11:32am PT
Quite fascinating. BUT, I rarely have bluetooth on. Who has BT on all the time? And then there's all the bad rap about PayPal. Personally, I've never had any issues with them..except for the fact that they took so long to get PayPal Here here in the UK. Good thing there are other mobile payment providers just as awesome such as mPowa here when I needed a card reader.

Philip Cohen:

Posted: 2013-09-11 @ 10:09am PT
Wot? Another load of nonsense from the eBay Dept of Spin ...
How about some reality ...
eBay's crooked marketplace ...
The clunky "PreyPal" ...
And the ongoing joke of it all ...



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