September 30, 2011, 12:00 AM

PayPal makes its move into retail stores with a slew of new payment technologies

The online payments company has introduced several features to let consumers pay with PayPal in bricks-and-mortar stores, including tapping a mobile phone against payment terminal and using a new PayPal credit card.

Zak Stambor

Managing Editor

Far from its roots as the way to pay on eBay, PayPal, the online payments unit of eBay Inc., has introduced several features aimed at enabling consumers to pay with PayPal at bricks-and-mortar stores.

PayPal disclosed three ways that consumers will soon be able to pay with PayPal. A shopper registered with PayPal will be able to enter onto the payment terminal screens at participating merchants her mobile phone number and a personal identification number, she'll be able to tap her phone against a terminal—if her phone and the terminal both are equipped to handle wireless payments, and PayPal plans to issue a card that the shopper can pay with at existing credit and debit card terminals in stores.

The long-range plan is to insert PayPal throughout the purchase process—this could include viewing mobile ads geared to the shopper's location, scanning a bar code while in a store, using PayPal's inventory search to look for a local merchant that has a product in stock, paying for the product, and also managing the payment of the purchase via a consumer's virtual wallet.

"PayPal is reimagining money and making it work better for merchants and consumers—whatever device you're on, wherever you are in the world, and however you prefer to pay (whether that's cash, credit, or installments)," Scott Thompson, PayPal's president, wrote in a blog post last month.

"What we're bringing to point-of-sale is an approach that merchants like, in that it will accept all tender types, be they card or hands-free or mobile," eBay CEO John Donahoe says.

PayPal aims to roll out point-of-sale functionality to up to 20 national retailers by next year. "We intend to help retailers grow their businesses offline in the same way we help merchants grow online around the world," Donahoe says.

PayPal also wants to enable consumers to pay with their mobile devices without ever going to a checkout counter. In a video posted on the eBay blog, a shopper walks into a crowded grocery store, scans the bar code of a bottle of barbecue sauce and birthday candles using the PayPal app, clicks Pay via PayPal, and walks past the cash register after a cashier waves to assure her she received the payment.

PayPal did not immediately disclose what it would charge store retailers for its payment services.


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