New PayPal app brings mobile payments to the high street

PayPal has announced that its UK customers will now be able to use their smartphones to pay for goods on the high street.

The PayPal inStore app can be used at stores owned by the Aurora Fashions group, which include Coast, Oasis, Warehouse and Karen Millen.

Available on Android and iOS, the app gives PayPal a huge head start on its rivals in the mobile payment industry.

As previously reported, NFC is the technology that most people assume will eventually become the standard for mobile payments and Visa is planning a limited trial during the London Olympics.

However, security concerns among consumers and limited availability of NFC enabled smartphones remain barriers to widespread adoption.

PayPal's app wil face similar concerns, but the tie in with well-known high street stores should enable it to gain traction with consumers.

Also, a lot of people will already recognise and trust the PayPal brand having used it online.

No financial data is actually stored in the app and if a user enters their PIN incorrectly three times then their account is automatically terminated.

PayPal inStore works in a similar way to Starbucks’ loyalty card app.

The customer enters a PIN to open the app where they are presented with a unique barcode and transaction number.

The cashier then scans the barcode and the payment is automatically deducted from the customer’s PayPal account.

It even works when there is no Wi-Fi or 3G access, as the app stores multiple codes for use when offline.

From Aurora Fashion’s perspective, the app may offer the chance to improve their multichannel marketing.

Mobile is a key tool for creating a single customer view, as it can enable retailers to gather data on their customers while they are in-store.

Furthermore, Aurora will be able to drive loyalty and improve sales by targeting customers with specific deals based on their demographic profiles.

PayPal inStore allows customers to sign up to offers within the app and any discounts are then deducted at the till.


Topics: Mobile Strategy & Operations Customer Experience
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Reader comments (5)

  1. James Perrin James Perrin

    Content Marketing Manager at Koozai

    10:42PM on 30th May 2012

    This is a really interesting development in mobile payments. All the talk is of NFC, but having an App like this really does show that there are other options available to the consumer.

    There are a few issues though. Generally speaking, the ease at which people can pay for things via their phone has come under scrutiny. Specifically, this App is no different. It will take time to load, enter your password and then wait for a barcode to appear for the cashier to scan. Also, only being available to the Aurora Fashions group at the moment does limit its appeal somewhat.

    However having the might of PayPal, a recognised payment brand will be hugely beneficial, and who knows, if it's successful they may take on many more retailers. I'll be watching the developments of this closely. Thanks for the update.

  2. Avatar-blank-50x50 AC

    12:02PM on 31st May 2012

    So, without seeing the technology in store, or knowing the exact steps in the "in-store" process, isn't there a security risk here ?

    If the photo is correct and it is a "1d" barcode, I could look over the shoulder of the person in front and then memorise the number.

    Then all I need to do is mock up the screen that is being shown in photoshop and show it to the cashier, or am I missing something ?

  3. David Moth David Moth Staff

    Deputy Editor at Econsultancy

    12:06PM on 31st May 2012

    @AC, that's a cunning plan you have there, but I don't think it would work :)

    Each transaction code is unique, so once it has been used for a transaction it can't be used again. Therefore, assuming you could memorise the code and create a mock-up, the barcode scanner would reject it anyway.

    Plus I think people will be quite cagey about it, in the same way that you cover up your PIN when entering it into a card reader.

  4. Avatar-blank-50x50 AC

    12:34PM on 31st May 2012

    Ah i see, I had missed the point about it storing multiple codes.
    Still something a little uncomfortable about the offline aspect of it.

    I wonder if there is a way to disable the stored codes if the phone is stolen ?

    If someone steals my phone. As the phone doesn't go online to validate the pin, the pin must be stored in the phone somewhere.
    So a skilled hacker could work out the pin, then they can present one of these offline codes and collect a brand new Karen Millen dress.

    I know this is no worse than someone stealing my debit card and use a mag strip reader to get the pin, but I would have hoped we would have moved past those kind of risks with new technology!

  5. Avatar-blank-50x50 Philip Cohen

    10:57PM on 31st May 2012

    Read about it and weep, John Donahoe ...





    eBay / PayPal / Donahoe: Dead Men Walking

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