PayPal Beacon: an introduction

PayPal unveiled Beacon in the US in September, which uses Bluetooth Low Energy (BLE) technology to enable connected devices to communicate with each other in a seamless process.

An integrated solution that allows a transaction to take place without having to open up an app, doesn't require GPS to be turned on and can operate without a phone signal, Beacon is being marketed to retailers as an energy-saving alternative to PDQ machines, NFC and GPS.

Writing on the PayPal UK blog at the time, Rob Skinner said: "This technology is our most significant contribution to-date in reinventing the in-store shopping experience.

"Beacon is a new add-on technology for merchants that will enable consumers to pay at their favourite shops completely hands-free. Consumers will have full control of the shops they will want to check in to, those they will want to get prompted to confirm payment for, and shops they will want to enable a complete hands-free experience for.

"In the latter case, simply walking in a shop will trigger a vibration or sound to confirm a successful check-in (this happens in milliseconds), their photo will then appear on the screen of the point-of-sale system so they can be greeted by name. Paying only requires a verbal confirmation, and that's it. No wallet. No card. People won't even need to take their phone out of their pocket."

PayPal says the Beacon will not constantly track people's location, and if someone enters a shop and they do not want to check-in to a shop no information is transmitted to PayPal or the merchant. Since September, PayPal has been inviting developers to submit their ideas and gain access to a free test version before the technology is rolled out next year.

Paula Rosenblum, a retail analyst at RSR Research in the US, is backing PayPal in the battle to develop the go-to payment method, and recently said as much in an article reprinted in Essential Retail.

Addressing the different payment platforms now available on the market, Rosenblum commented: "What the industry forgot to do was ask the consumer. In my view, as a method of payment, NFC is a non-starter. And that's why PayPal is going to win [the mobile payments race]."