PayPal Beacon promises hands-free mobile payments via Bluetooth LE

The latest mobile payments option from PayPal isn't even available for the masses yet, and it's flaunting some big promises that look almost too good to be true.


SAN FRANCISCO -- PayPal has unveiled its latest digital payments scheme, promising what could be the holy grail of mobile wallet solutions: easier than a credit card.

Certainly, there are plenty of digital payments products out there that are already arguably easier to use than swiping a credit card -- once configured with all of the right data and then work properly. That gamut ranges from having a Square account to even an auto-reloading Starbucks card.

PayPal asserted that its new add-on accessory, Beacon, fits the bill.

Beacon is a Bluetooth Low Energy USB module for merchants designed to enable consumers to pay hands-free. The device sets up communication between points-of-sale and mobile devices with PayPal apps set up, meaning no GPS, wireless or mobile networks required.

Based on initial demos and promo videos, PayPal Beacon looks almost too good to be true.

Basically, the customer sets up their preferences as to where they can be automatically checked in and then charged for services, goods, and restaurant/cafe bills when done. It looks more like online shopping on-the-go rather than just making a mobile payment.

PayPal president David Marcus, who described in Monday's announcement that the eBay subsidiary toyed with GPS and Wi-Fi versions as well as geo-fencing via iOS, offered the following example of how Beacon should work in an ideal world:

Now, instead of finishing a meal at a restaurant by waiting for the server to run your credit card, and then finally return it for your signature, you can simply pay using your PayPal app and leave when you’re ready. And, instead of waiting in a line to pick up and pay for your takeout order, you can order ahead through our new app to skip the line altogether.

Naturally, this raises a lot of questions about privacy and security on both sides of the cash register, sparking concerns about customers being checked in and charged incorrectly -- or even people just walking away with something without paying properly.

In regards to privacy, Marcus asserted that Beacon won't "constantly track your location like other technologies." As for the payments process, he explained, "If you enter a store and decline to check in, or just ignore the prompt entirely, no information is transmitted to PayPal or the merchant."

Consumers will have full control of stores they will want to check in to, those they will want to get prompted to confirm payment for, and stores they will want to enable a complete hands-free experience for. In the latter case, simply walking in a store will trigger a vibration or sound to confirm a successful check in (this happens in milliseconds), your photo will then appear on the screen of the Point-of-Sale system so you can be greeted by name. Paying only requires a verbal confirmation, and you’re done.

Beacon made its hands-on debut at TechCrunch Disrupt 2013 in San Francisco on Monday, with plenty of tech entrepreneurs already queuing up to get a closer look at the scheme on display at a pop-up coffee stand in the Concourse Exhibition Center.

Beacon won't be rolling out until at least early next year, but the pilot program is scheduled to kickoff in the midst of the holiday season during the fourth quarter.

For a closer look at PayPal Beacon, check out the promo video below:

Image via PayPal