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SAN JOSE, Calif. -- PayPal will launch new technology called payment code that allows consumers to make purchases by scanning a quick response (QR) code on their smartphones. Customers can also alternatively choose to receive a short four-digit code on their phone to complete a purchase.
"Our approach isn't to push technology for technology's sake, but to truly make the paying experience better for consumers and to give merchants more opportunity to innovate without a costly investment," said Don Kingsborough, vice president of retail services for PayPal. "Payment code is easy to use and understand, and utilizes a ubiquitous technology that merchants have and are familiar with."
According to Kingsborough, payment code is expected to launch globally in the first quarter of 2014. To access it, consumers will need to open the PayPal app, or a merchant's app, and check in. Once checked in at a particular location, the app prompts the customers with a QR code or a four-digit short code to complete the purchase.
Payment code offers several benefits to both merchants and consumers, Kingsborough said. For merchants, payment code allows them to offer a new mobile payment option without replacing their existing point-of-sale (POS) technologies.
"Utilizing the millions of 2D barcode scanners already sitting on store counters and 40-plus million payment terminals available around the world, this offers an easy way to give customers the benefits without investing in a technology," the vice president said.
As for consumers, payment code allows them to automatically redeem any special offers, gift cards, merchant rewards programs or other forms of payment that might be saved in their PayPal mobile wallet in one quick transaction, noted Kingsborough.
Convenience store retailers who already offer their own mobile app will be able to integrate payment code. The PayPal QR code will appear as an item within the merchant's app.
San Jose, Calif.-based PayPal is a division of eBay Inc.