PayPal continues to extend its mobile payments prowess, with more than 50 cafes, food trucks and restaurants in Toronto now enabling customers to pay for purchases via the PayPal application.

Participating businesses such as Jimmy’s Coffee, Thor Espresso Bar and Cafe Novo can now notify users of exclusive offers. The PayPal app works by users checking into an establishment, with the customer’s name and profile photo then appearing on the restaurant’s payment system.

“We are concentrating on promoting it here mainly because this is where we had our employee pilot,” said Kerry Reynolds, head of consumer marketing at PayPal Canada, Toronto. “And then also because there is such a vibrant food culture scene here in Toronto and the restaurants have been particularly receptive to participating in this initiative.

“At this point, we are definitely concentrating on the hospitality space, and it is mainly also because it is an area where we had done some research and people have the most friction around going out for the evening and not wanting to bring their wallets,” she said.

Profile photo
The PayPal app has been available across Canada for several years, but this is the first time users will be able make payments in physical locations via the app.

The ability to pay in-store via the app is also currently available in the United States, Britain and Australia.

PayPal continues to expand its payments app into new markets as consumer interest in mobile payments grows. A recent survey conducted by PayPal shows that 87 percent of Canadians wish they could be wallet-free.

After downloading the app, users swipe to check-in at a location and let the server know that they are paying with PayPal.

Once they check-in, users’ names and profile photos appear on the restaurant’s payment system, making it easy for servers to identify PayPal users. Once servers take customers’ orders and confirm the amount to be paid, payment is made by clicking on a customer’s photo.

Customers then get an alert on their phone informing them of the amount paid and an email confirmation from PayPal, eliminating the need for paper receipts.

Users can also search for nearby restaurants that accept PayPal and redeem exclusive offers. Such offers can help restaurant owners drive brand engagement and customer loyalty.

Line busting
Another benefit of the mobile payments scheme is that it can help shorten lines during busy periods as payment is quickly processed by tapping on a customer’s photo.

The program also helps restaurants improve customer service by enabling servers to address customers by their names.

Other businesses in Toronto accepting PayPal include Belly Busters, Come and Get It, Lil’ Bean N’ Green, Boehmer, SpiritHouse and Snakes and Lagers.

Users can pay from their bank account, credit card or the balance in their PayPal account. Sensitive financial information such as bank account or credit card details are not stored on the phone.

“Restaurants drive impulse, low-risk purchases and gives PayPal an opportunity to steer tender and get some early wins,” said Gary Schwartz, Toronto-based author of “The Impulse Economy” and “Fast Shopper, Slow Store.”

Mr. Schwartz is not affiliated with PayPal. He commented based on his expertise on the subject.

“Canada has always been a good beta cousin north of the U.S. border,” he said. “We have run many national launch-and-learn trials for brands and retailers in the Canadian market.

“The Canadian consumer is already familiar with tapping and pinning at POS. PayPal, large Canadian banks and many other payment stakeholders want to start to move checkout behavior away from cowhide and plastic and toward a phone-based wallet.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York