PayPal Teases Beacon, a Piece of Hands-Free Payment Hardware Fighting an Uphill Battle
E-commerce companies really, really want to change the way you buy things.
The latest bid comes from PayPal in the form of “Beacon,” a piece of hardware built for merchants with the aim of making retail in-store transactions hands-free.
The pitch: Plug the small, attractive piece of PayPal-designed hardware into a power outlet at your retail store. The device taps into the point-of-sale software at the store (provided it’s compatible with PayPal’s app) and will auto-recognize when customers walk into their store. From there, customers can pay via their PayPal accounts at the point of sale, without having to pull out their phones or wallets.
Sound familiar? Probably because you’ve seen it before with Square’s Wallet product, another hands-free payment option, which lets you pay at partnering businesses by simply giving the cashier your name. PayPal’s value proposition, however, is that Beacon uses Bluetooth technology to recognize your smartphone (or rather the updated PayPal app on your smartphone), rather than Square’s app, which sucked battery life from users’ phones.
The problem is, it’s not exactly untrodden territory. Other payments startups have tried for wide distribution by giving out products to merchants (think Scvngr’s LevelUp, for one) with limited success. The experience is fragmented. Merchants aren’t able to properly train their staff to handle multiple types of payments from companies. And it usually means downloading yet another app for the phone.
PayPal’s potential advantage is scale and resources: Seed the market with a bunch of free hardware, and you’ll potentially gain a bunch of new hands-free merchant evangelists. Or perhaps send that hardware out to the myriad Home Depots that already integrate some PayPal purchasing options.
Still, many have yet to be truly convinced by any payments company that their solution is easier than a straight-up analog one: Slapping cold, hard cash down on the counter.
Don’t expect to see PayPal’s Beacon any time soon; it’s testing with only a handful of merchants in the near future, with a presumed wider rollout to come in 2014.