On Sept. 9, 2013, PayPal Inc. President David Marcus revealed on the company's corporate blog its new iteration of hands-free payments at the POS. The solution, dubbed PayPal Beacon, takes advantage of wireless Bluetooth technology that reportedly bypasses the need for consumers to access mobile wallets or produce bankcards when paying for purchases at brick-and-mortar locations.
PayPal Beacon involves a device that plugs into a wall socket and communicates with retailers' POS systems and consumers' smartphones. The technology that underscores this communication is called Bluetooth Low Energy (BLE), which enables connected devices to communicate with each other seamlessly, while keeping energy consumption at low levels.
Marcus said that by walking into stores, consumers trigger a vibration or sound to be communicated between devices, which confirms a successful check in. When consumers are ready to check out, no cards, or even launching mobile apps on smartphones, are necessary. "Paying only requires a verbal confirmation, and you're done," Marcus said. "No wallet. No card. Nothing to do. Not even touching your phone."
Marcus said PayPal developers investigated other technologies before deciding on BLE. "We played with geo-location leveraging GPS and Wi-Fi," he said. "We played with geo-fences in iOS. But none of these solutions met our standards."
"With the introduction of PayPal Beacon, I believe we're opening the door to a fundamentally different way to use technology to make shopping richer and more valuable for consumers and merchants alike," Marcus said. "This technology is our most significant contribution to date in reinventing the in-store shopping experience."
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