The ‘Holy Grail’ of Retail?

Beacon, a location-based shopping gadget by PayPal and eBay, allows retailers to automatically identify and authenticate PayPal users as they walk in.

December 09, 2013

MCLEAN, Va. – Recognizing shoppers as they walk into the store through their mobile device? Check.   

Beacon, writes USA Today, is an effort by PayPal to get consumers in physical stores to make a purchase with their smartphones rather than by paying with a credit or debit card. 

“This is the one thing I'm most excited to launch since joining PayPal," said David Marcus, president of PayPal, the online payment division of eBay, back in September at the TechCrunch Disrupt conference in San Francisco, USA Today reports. "This is the first thing I think that is better than swiping a credit card."

USA Today describes Beacon as “a three-inch high stick that plugs into a wall socket and lets stores automatically identify and authenticate PayPal users as they walk in. The gadget connects to stores' point-of-sale systems and shoppers' smartphones using BLE [Bluetooth Low Energy] technology, letting consumers pay without launching an app or remembering to check in — actions that are currently needed to pay with the PayPal smartphone app.”

Hasty Granbery, lead engineer for Beacon, told the newspaper that the device has many advantages over traditional geo-fencing, including its ability to locate smartphones more accurately inside the store. “So if you're standing in the TV department for 30 minutes, a retailer can send you an offer for 10% off if you buy in the next 20 minutes," he explained.

PayPal employee tests of Beacon are now taking place or getting ready to launch at Spice Hut, a restaurant and food truck business in Silicon Valley, Telegraphe Cafe in New York and Get York Coffee in Sydney, Australia. EBay is also some retail employees to use the Beacon technology, noted USA Today, but the company did not say which companies are involved in those tests.

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