The company is to "develop software that transforms mobile phones and other devices into 'digital wallets' that consumers can use to buy merchandise, keep coupons and store loyalty program data."
PayPal president Scott Thompson has revealed that moving the online payments service into the retail arena is now the company's top priority.
According to The Wall Street Journal, Thompson said in an interview that the company's top priority "is to develop software that transforms mobile phones and other devices into 'digital wallets' that consumers can use to buy merchandise, keep coupons and store loyalty program data."
Some of the software to do that is expected to be unveiled at a PayPal conference as early as October this year, the report continues.
The news follows the launch of a trial in Palo Alto, Silicon Valley which enables both local consumers and all of PayPal's 2,000 headquarters staff to use Bling Nation's mobile contactless payments solution to make purchases at a range of local merchants.
Bling Nation's technology is specifically designed to reduce transaction processing costs by cutting out middlemen such as acquirers, processors and brands such as Visa and MasterCard. The technology is also NFC-ready, meaning that it will work with phones equipped with near field communication technology as soon as they become widely available.
Consumers participating in the trial can pick up a contactless sticker from any participating merchant. They then visit Bling Nation's website to link the sticker's ID number to their PayPal account and affix the sticker to the back of their mobile phone. To make a payment, they simply tap their phone at the point of sale. Transaction details are then forwarded to a back office processor which approves the transaction, debits the consumer's PayPal account and credits the merchant's account — all in real time.
Consumers then receive an SMS text message confirming the transaction details and providing the current balance on their account.
To begin accepting the new payments solution, merchants need a PayPal Business account and a BlingBox, a pack containing a stand-alone terminal, stickers that they can distribute to their customers and a range of promotional materials. The box usually costs US$149.95 but 150 units are being made available free of charge for the trial.
• Scott Thompson has extensive experience of 'real world' payments processing as well as the online payments arena. Before joining PayPal he was executive vice president of technology solutions at Inovant, a subsidiary of Visa, where he was responsible for the development, support and maintenance of Visa's global payment system.