PayPal has announced its new service that would enable shoppers to use their PayPal accounts to pay for goods and services at brick-and-mortar stores. The new system is called Payment Code. It is a new technology that uses apps to generate QR codes that in turn could be read by special scanning devices used by partner merchants.
The new payment method is a follow-up to the company’s previously launched payment system called Here. It enables smaller business partners to accept card payments that are processed by PayPal. In this earlier system, small readers are attached to smartphones used by merchants.
The new payment system would be another way for PayPal to possibly breakout of its own walled processes. It aims to make PayPal useful even in physical stores. Since its start, PayPal has maintained its online payment processing functions.
Continuing preceding Here system
The online payments processor of eBay has the intention to continue its Here system. Payment Code would target larger retailers and businesses, which may tend to be slower in investing in new equipment and adopting new technology. PayPal believes it may be difficult to alter the behavior of those larger businesses.
However, PayPal has devised a way to make Payment Code still useful even without the QR code-reading scanner. The system would generate a four-digit code that could be punched into a special terminal that could read cards. This way, the process would be less reliant on the app but still useable on equipments that are already in stores.
Collaboration with partners
When Payment Code is first rolled out before the end of this year, it would initially be used in stores or merchants that are included in the Discover Network, which has several millions of locations. It would also be rolled out in partnership with a few banks like First Data and a number of credit card partners. The company declined to name any of its possible partner merchants but reliable sources claimed that it would include major retailers like Home Depot.
The special app could use bar codes and other numeric or graphic authentication services in the future, along with the QR codes. PayPal believes that it is an advantage to use an app for a new payment method because it could expand into other technologies and procedures as retailers and shoppers go along.