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PayPal tests bar code app for mobile payments in Britain

June 1, 2012

Borrowing a page from Starbucks’ successful mobile payments strategy, PayPal has begun piloting a new application that enables users to make purchases via a unique bar code linked to their account.

PayPal continues to test the waters for different mobile payments solutions, with the new PayPal inStore app just the latest example. The app, which generates a unique bar code to make a payment similar to the Starbucks payments app, officially launched yesterday and is available at Coast, Oasis, Warehouse and Karen Millen stores for a total of 230 locations.

“The four brands that we’ve launched with are very well known fashion brands and very innovative brands,” said Rob Skinner, head of public relations at PayPal UK. “It fits very well with our view that new ways to pay have to be better than what is available now.

“The app is simple to use and enables retailers to handle refunds of online transactions in store to help their multichannel strategy,” he said. “Also, offers will be automatically applied on behalf of consumers.

“This is good news for retailers, makes life easier for consumers and helps the retailer build that relationship with the consumer.”

Delivering offers
The app-based mobile payments solution generates a unique bar code that the cashier scans to take payment from the user’s PayPal account. Alternatively, the cashier can scan in the unique transaction number that appears under the bar code.

The mobile bar code payments app is similar to Starbucks’ successful mobile payments app that also generates a bar code that is scanned at the cash register.

Users unlock the app with a unique PIN number. No personal data, financial information or money is stored on the phone.

Users can also receive discounts on the app to use in store.

At retailers who have equipped store associates with an iPad and scanner, users of the PayPal app will be able to complete a purchase on the store floor without having to wait in line at the checkout.

First time users will need to download the app, link it to their PayPal account and create a secure PIN.

To pay, users open the app, enter their PIN, select the store and a bar code will appear.

If there is an offer available at the store, it will show up on the app. If the user accepts the offer, it will be automatically redeemed.

The app works when there is no mobile or Wi-Fi signal.

The PayPal inStore app is available for the iPhone, iPad and Android devices.

Test and learn
PayPal continues to expand its in-store payments offerings and is testing a variety of strategies.

The company recently added 15 national retailers who will implement at the point-of-sale to enable customers to pay by keying in their mobile phone number or using a PayPal payment card (see story).

Last year, PayPal tested an NFC mobile payments application at two stores in Sweden (see story).

“What we’ve announced fits in very well with in-store payments,” Mr. Skinner said. “It is very much a solution aimed at the UK market and reflects the fact that smartphone penetration in Britain is very high and that shoppers are starting to look at mobile as a way to pay.

“It is also part of our test and learn approach to see what works and adapt according to the experience,” he said.

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