PayPal Unveils Yet Another Way to Pay in Stores. Now It Has to Get People to Use It.
Another day, another announcement of a product aimed at getting shoppers to buy stuff in retail stores using an app on their phone instead of a physical credit card or cash.
This one — from PayPal, called Payment Code — lets users pay through their PayPal app or a retailer’s app integrated with PayPal in a few steps. First, they need to check in on the app. Then, if the shopper is in a store that has bar-code-scanning devices, the app will automatically load a QR code for the cashier to scan to complete the transaction.
For participating stores that don’t possess those scanners, the app will display a random four-number code for the shopper to punch into the store’s payment keypad to finalize the sale.
Sound easier than paying with a credit card or cash? No. And PayPal says it recognizes this.
So it will give shoppers other incentives to pay with the app — namely, a seamless way to surface and use discounts and loyalty programs already loaded into the app. The payment method will launch next year.
Still, participating merchants — PayPal isn’t announcing any yet — are going to have to buy in to the fact that discount offers will be needed to convince people to use this method. But you’d have to imagine that PayPal will give the merchants some incentives to do so.
This payment method is just the latest in a series that PayPal has announced. It recently said it will offer retailers hardware devices that detect the phones of PayPal users and let them pay without pulling out their phone or physical wallet.
Previously, PayPal rolled out the ability for PayPal customers to pay with either a PayPal card or with their phone number and PIN at participating retailers, such as Home Depot. But the recent move toward encouraging shoppers to complete transactions through its mobile app seems to be a signal that PayPal is moving past the first iteration of its in-store payment methods.
And perhaps with good reason. In a recent research note, RBC Capital Markets relayed information about visits that it made to 11 Home Depot stores in the San Francisco Bay Area to get a feel for adoption of PayPal as an in-store payment option. Overall, RBC explained that the payment option has “still limited traction.”
Nonetheless, PayPal is working hard to get a piece of offline payments however it can. Along the way, it is providing shoppers with several options to pay with PayPal. But, until paying with a phone becomes as easy as paying with current methods, people are going to need real incentives to use these alternatives.