PayPal launches QR code-based in-store payments platform

Payment Code lets merchants capitalize on m-commerce while leveraging existing in-store technologies

PayPal unveiled Payment Code--a new in-store payments platform enabling consumers to complete purchases with their mobile phone by scanning a QR code or activating a four-digit code.

Payment Code allows merchants to capitalize on mobile commerce innovations while leveraging technologies already installed in their stores, said Don Kingsborough, PayPal vice president of retail services. More than 40 million Payment Code-ready point-of-sale terminals are active worldwide. 

"When you're ready to pay, simply open the PayPal app (or the specific merchant's app) and check in," Kingsborough explained. "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, [and] you (or the merchant) simply punch that code into the PIN pad at checkout. Boom, done!"

Payment Code also enables consumers to automatically redeem special offers, gift cards and merchant rewards programs. PayPal expects to roll out Payment Code during the first quarter of 2014. Kingsborough said the company will reveal additional details at that time.

PayPal is expected to handle around $20 billion in mobile transactions this year, up from $14 billion a year ago. Its existing applications for Apple's (NASDAQ:AAPL) iOS and Google's (NASDAQ:GOOG) Android enable consumers in close to 125 international markets to make payments at restaurants, stores and other businesses. Users may also send and request funds, browse nearby offers and order food ahead of pickup.

The eBay-owned company's mobile efforts also include PayPal Here, which enables small businesses and other users to process credit and debit transactions by swiping cards through a dongle that attaches to their smartphone or tablet. PayPal Here charges US merchants a flat rate of 2.7 percent per transaction, a .05 percent savings over rival Square's mobile payment offering.

Last month, PayPal introduced Beacon, an add-on technology enabling consumers to complete in-store mobile payments without removing their phone.

Days later, eBay reached an agreement to acquire digital commerce startup Braintree Payments Solutions for approximately $800 million in cash to further expand PayPal's m-commerce reach.

The Braintree platform enables developers, merchants and other clients to accept payments within their mobile apps and websites, collecting a 2.9 percent commission and 30-cent transaction fee on each purchase. Partners include Airbnb, OpenTable, TaskRabbit and Uber.

For more:
- read this PayPal Forward blog post

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