PayPal to offer hands-free payment through smartphone app

PayPal's Beacon technology will be rolled out early next year

PayPal Beacon Device

PayPal Beacon Device

In its bid to boost its acceptance in physical retail stores, PayPal has introduced technology that will enable people running its app on smartphones to automatically check in at stores and restaurants.

Paying only requires a verbal confirmation, the payment processor said in a blog post describing its hands-free Beacon technology that uses the Bluetooth Low Energy standard for wireless communications between the store's point-of-sale system and the customer's smartphone to identify and authenticate users.

Beacon also does away with the requirement to swipe credit cards when making payments. PayPal said its team started working "on designing an integrated solution that would enable a transaction to take place without having to open up an app, without GPS being turned on, and even without a phone signal for those places with thick concrete walls."

Consumers will be able to choose those stores they will want to get prompted to confirm payment for, and stores where their walking into the store will trigger a vibration or sound to confirm a successful check in. "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," PayPal said.

Stores running point-of-sale systems compatible with PayPal will have to plug a PayPal Beacon device in a power outlet in their store. PayPal Beacon sends out a Bluetooth low energy signal to anyone with the PayPal app.

PayPal plans to start piloting the technology in the fourth quarter with full rollout planned for early next year.

PayPal is giving 100 developers that submit the best ideas access to the mobile in-store payments API (application programming interface) and a free developer version of the PayPal Beacon device. Developers are expected to try out ways to improve shopping experiences for customers, such as placing a customer's usual order as soon as they walk through the door or an interactive map to see where sales items are located.

Beacon will be available in the US, UK, Australia, Canada, Hong Kong and Japan. The pricing of the device was not disclosed. PayPal introduced last week a redesigned app that allowed people to order ahead at restaurants, starting with Eat24 locations. Users can also use the app to view and pay the restaurant bill.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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