PayPal reveals Beacon: a new way to check out and interact at stores

The future, according to PayPal, (s EBAY) is retailers knowing exactly when you arrive and exactly when you depart with ample opportunity to deliver you content in between. PayPal Vice President of Global Product Hill Ferguson just revealed Beacon, a USB stick that communicates with shoppers’ mobile phones via low-energy Bluetooth to automatically check them in, offer discounts and enable a hands-free checkout.

PayPal Beacon

“No taps, no swipes, no signatures. The payment completely gets out of your way,” Ferguson said.

Retailers combine Beacon with an existing point-of-sale system. It communicates with customers’ PayPal mobile app and automatically pulls up their name and picture on the PoS system. When they check out, the person at the register can greet them by name and verify by their picture the charge should be sent to them.

Customers also have the option to customize the Beacon experience. They can require a manual PayPal check-in at the store or approval for purchases above a certain price.

Ferguson said PayPal is opening Beacon to developers, who he thinks will find applications for the time between a customer entering a store and checking out. I take that to mean interacting with products and sales, such as the interactive grocery aisles Intel debuted earlier this year.

PayPal will release Beacon next year. It will likely prompt the usual privacy outcry from critics, but Beacon sounds like a good way to further reduce friction when it comes to card- and cash-free payments.