I like this solution. It is as he says in his video “FAST, EASY, SAFE AND SIMPLE”. PayPal’s blog announced in May 2012 that its “Pay inSTORE” app would be available for use at Oasis and other major retail brands. This app is available for iPhone or Android and allows customers to pay through PayPal. This app allows retailers to use their existing infrastructure to add mobile payments.
The UK PayPal Pay InSTORE app can be used in three ways:
1) Mobile payment through iPads.
2) Scan a barcode from the app.
3) Write the number below the barcode directly on the payment terminal.
The Pay inSTORE app can also be used to redeem offers collected online and forwarded to the phone app. PayPal users can also choose to receive and redeem special offers using the app. also. This is big!
PayPal’s store checkout in the UK, like its ‘sister app’ in the US, allows users to pay without using their mobile phone. In the United States, users enter their mobile phone number + PIN and in the United Kingdom, users enter a user or transaction ID to make a payment. Correct me if I’m wrong, but this will require integration into POS to accept these transactions. Payment terminals are programmed or configured to only accept a certain range of gift card numbers. Each gift card provider obtains certification on each terminal, but acquiring merchants can program terminals to allow transactions only through their associated processor. Having users manually enter a virtual card number, which represents a credit card, makes no sense as it opens the door to PCI noncompliance.
PayPal UK InSTORE Checkout allows merchants, unlike in the US, to scan a barcode to enable mobile payments. It appears that the POS cash register will need to be configured to scan a 1D barcode as a gift card. This can be fairly straightforward, if the merchant has access to or the ability to configure their POS software to do this. From there it gets a bit more complicated.
Every POS software has a gift card port and some are connected to a single processor or solution. If the processor has partnered with PayPal, they will be able to route the transaction for approval through PayPal. Of course, it’s possible, through its recent partnership with Discover, that PayPal transactions could follow Discover’s rails, with the processor routing the transaction as a credit card transaction. If this is the case, processors may still need to convert transactions from a non-financial or gift card transaction to a financial or credit or debit transaction to route through Discover. This may be an unnecessary step or not the easiest step due to legacy systems.
Processors like Mercury, PayPros and Merchant Link may have a key advantage here to use their existing relationships with POS providers. First Data, TSYS, Global, ChasePaymentech and Vantiv (5th 3rd) can also make a big play here and now if they choose. Eventually, the transaction would be routed to PayPal for actual authorization using the user’s chosen payment method locked in the digital wallet.
Although PayPal may be offering a preview of its mobile payment future for the UK and beyond, it will still require some POS and processor integration. Could PayPal already partner directly with POS providers like Micros and NCR to create a direct connection to PayPal?
This is by no means out of the question and it makes a lot of sense for them to do this themselves. By dispensing with processors, they are creating their own payment network with each direct connection to PayPal. However, I’m sure most processors would wisely partner with PayPal here to take advantage of the 100+ million PayPal users that PayPal would want to route through their gateway. This seems to be the way to go and it is win-win-win, with the third ‘Winner’ being PayPal connecting merchants with their users.
If processors decide not to work with PayPal, I’m sure PayPal, if it hasn’t already offered POS providers the option to connect their software directly to PayPal’s API, will announce it soon. I’m not trying to top PayPal news or guide them down the path that’s available to them, or maybe I’m just doing one of those? However, PayPal is not the only one that can, will, or has already started building such direct payment gateways that connect POS to Mobile Wallet, but they will surely be a tough competitor in this space.
There is still, as I pointed out in my previous article on PayPal, another way around this integration issue, of which Square can have the same issue and seamlessly use their partnership with Discover to enable their new ‘Pay InStore’ app, so Therefore, it does not require software or hardware integration at the point of sale.