Don Kingsborough, Vice President of Retail Services, PayPal
Yesterday, we shared our new white paper outlining how we see point of sale evolving over the next few years. We’ve had a busy month innovating with new technologies including our new app and PayPal Beacon.
PayPal Beacon allows merchants to make check in seamless and automatic for consumers by letting them just pay with an image of their face that appears on a merchant's POS screen. But what if the merchant POS system doesn’t have a screen that can display images? That's why today we’re introducing Payment Code. No need to rip & replace hardware at the point of sale to take advantage of leading edge technologies to make payments easy and drive consumer engagement.
This new technology lets consumers make purchases by scanning a QR code on their mobile phone, or receive a short four-digit code on their phone to complete a purchase. Payment code is an extension of our offerings for enhancing the payments experience in-store. Our approach isn’t to push technology for technology’s sake, but to truly make the paying experience better for consumers and to give merchants more opportunity to innovate without a costly investment. Payment code is easy to use and understand and utilizes a ubiquitous technology that merchants have and are familiar with.
How does it work?
When you’re ready to pay, simply open the PayPal app (or the specific merchant’s app.) and check in. Once you’re checked-in at that location, the app prompts you with a QR code, or a four-digit short code, to authenticate your purchase.
If the merchant has a barcode or QR code scanner, the merchant scans and, just like that, you have paid. If the merchant doesn’t then a four-digit code pops up on your phone, you (or the merchant) simply punch that code into the PIN pad at checkout. Boom, done!
What is the benefit to the consumer?
As we have said many times before, the problem that needs to be solved is not paying at a POS terminal. While payment code does make the checkout process smooth, with easy access to all funding sources in one simple place (your phone), the real benefit is that it will allow consumers to automatically redeem any special offers, gift cards, merchant rewards programs or other forms of payment that might be saved in their PayPal wallet in one quick transaction.
What is the merchant benefit?
Our philosophy at PayPal is to make digital payments as easy as possible for both consumers and merchants. Many of the merchants we have talked to – and trust us we have talked to a lot – want to get the benefits of these new ways to pay but they don’t want to rip out their existing technology to do it.
Payment code lets them take advantage of mobile payments using their old technology. Utilizing the millions of 2D barcode scanners already sitting on store counters and 40+ million payment terminals available around the world, this offers an easy way to give customers the benefits without investing in new technology.
But what if the merchant already has a mobile app for their customers?
Those merchants with a mobile app and older systems can still use payment code by integrating it into their own mobile app. The PayPal QR code will then appear as within the merchant’s own app.
We expect to roll out payment code globally in the first quarter of 2014, and look forward to sharing more at that time. This is just another way that we are driving new technologies and tools to help consumers and merchants of all sizes take advantage of the rising wave of digital payments.