PayPal Beacon Brings Point of Sale to Point of Pocket
By Ina Steiner
While everyone is vying to have their mobile app become the "digital wallet" of choice for consumers, PayPal leapfrogged competitors with a new technology that requires no fumbling with phones at the checkout counter.
PayPal Beacon lets consumers pay for items without ever having to take their smartphone out of their pocket by tying into its Point of Sales system - via Bluetooth rather than more traditional geofencing methods.
PayPal President David Marcus announced the new offering on a post on the PayPal blog:
"Beacon is a new add-on technology for merchants that will enable consumers to pay at their favorite stores completely hands-free. Consumers will have full control of stores they will want to check in to, those they will want to get prompted to confirm payment for, and stores they will want to enable a complete hands-free experience for. In the latter case, simply walking in a store will trigger a vibration or sound to confirm a successful check in (this happens in milliseconds), 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, and you're done. No wallet. No card. Nothing to do. Not even touching your phone."
Marcus explained that PayPal Beacon won't constantly track users' location. "If you enter a store and decline to check in, or just ignore the prompt entirely, no information is transmitted to PayPal or the merchant."
Given PayPal's recognition of consumer security concerns, the name of the product seems unfortunate for anyone who remembers Facebook Beacon. While consumers may at first be creeped out by the idea merchants can charge them without ever having to touch their phone or wallet, convenience will probably win out.
PayPal had to play catchup when Square launched its credit card reader popular with small businesses and crafters, and there are now many Square copycats, including PayPal Here. If PayPal Beacon is attractive to storeowners and shoppers, it may also face the prospect of a host of competing products.
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to firstname.lastname@example.org.
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