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PayPal introduces Beacon hands-free mobile payments system

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eBay-owned PayPal unveiled Beacon, an add-on technology enabling consumers to complete in-store mobile payments without removing their phone.

The PayPal Beacon hardware leverages Bluetooth Low Energy technology to communicate with mobile devices without requiring shoppers to open the PayPal app. "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," explained PayPal President David Marcus. "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."

The PayPal Beacon device integrates with any POS system compatible with PayPal, including Booker, Erply, Leaf, Leapset, Micros, NCR, Revel, ShopKeep, TouchBistro, Vend and the company's own PayPal Here, which enables users to complete transactions by swiping a credit or debit card through a dongle that plugs into a smartphone or tablet. Merchants simply plug PayPal Beacon into any power outlet in their store to activate the service.

"We value our customers' privacy, so PayPal Beacon won't constantly track your location like other technologies," PayPal said. "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 will offer Beacon to merchant partners in early 2014, concurrently rolling out updated applications for Apple's (NASDAQ:AAPL) iOS and Google's (NASDAQ:GOOG) Android supporting Beacon-enabled shopping experiences. Pricing and revenue sharing details were not announced. PayPal will also open its mobile in-store API to developers in an effort to galvanize Beacon-enabled shopping services, with pilots planned for the fourth quarter.

PayPal for iOS and Android are available in close to 125 markets worldwide. Combined with PayPal Here, which charges U.S. merchants a flat rate of 2.7 percent per transaction, the company is on pace to handle around $20 billion in mobile transactions this year, up from $14 billion in 2012.

For more:
- read this release
- read this PayPal Forward blog post

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