STRATEGIC PARTNERS
October 8, 2013
In the process of developing smartphone apps that enable cardless, pre-staged ATM transactions, manufacturers mostly settled on QR codes as cardholder authenticator and cash disbursement initiator. Now payments giant PayPal has announced that it will use the technology to trigger payments in retail settings.
The company today introduced Payment Code, a system designed to let smartphone-toting consumers complete their purchases by scanning a QR code on their mobile device, or by using a four-digit code sent to the device.
According to the PayPal blog, Payment Code is an extension of the company's offerings aimed at enhancing in-store payments.
"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," wrote PayPal VP of retail services Don Kingsborough. "Payment code is easy to use and understand, and utilizes a ubiquitous technology that merchants have and are familiar with."
When shoppers are ready to pay, they open the PayPal app (or the merchant's app) on their mobile device and check in at the merchant location, which will prompt the app to send a unique QR code or a one-time four-digit code to authenticate the purchase.
If the merchant has a barcode or QR code scanner, the merchant scans the QR code on the mobile device to complete the transaction. If the merchant does not have a scanner, a four-digit code pops up on the shopper's phone to be entered on the PIN pad at checkout, PayPal said.
Read more about transaction processing.
