One of David Marcus’s biggest challenges when taking on the role of President of PayPal was extending the platform into point of sale, and making it easier to pay with PayPal than swiping your credit card. But changing consumer behavior is an enormously difficult task. So he thought that the only thing more alluring than swiping a card is simply doing nothing when you check out of a store. Today the company is one step closer to making this a reality. PayPal is debuting Beacon, a new add-on hardware device for merchants that leverages bluetooth technology to enable consumers to pay at stores completely hands-free.

When thinking through the problem, PayPal played with geo-location leveraging GPS and Wi-Fi for iOS and Android. These technologies are what powers Square’s hands free payment system ‘Pay with Square. But they found that it ended up being a poor experience for the consumer because it sucked the batter life out of their phones.

Plus Marcus tells us that the company wanted to find a solution that would scale across point-of-sale systems.

PayPal began experimenting with Bluetooth Low Energy (aka BLE), which allows connected devices to communicate with each other while keeping the energy consumption by the devices at a very low level. Last June, PayPal recruited some of its best engineers and designers (and brought on a few hardware experts as well, says Marcus), including Mike Mettler, Hasty Granbery and Josh Bleecher Snyder to start developing the connected device. The initial goal was to develop a prototype that would leverage BLW to enable a transaction to take place without having an app running, without GPS being turned on, and even without phone signal for those places with thick concrete walls.


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