PayPal Unveils New Payment System

PayPal has unveiled a mobile payment product for customers that doesn’t require near-field communication (NFC) technology inside smartphones.

The system relies instead on using smartphones and other mobile devices to scan product bar codes and to authorize payments through PayPal mobile accounts. Shoppers will also be able to use credit-card scanning terminals commonly seen in grocery stores: The user inputs a phone number and PIN on the terminal’s keypad instead of swiping a credit or debit card.

PayPal President Scott Thompson laid out the basics of the plan in a blog posted Wednesday. In the blog, he also took a swipe at competitors, including Google, MasterCard, Visa and others, who are working with NFC in smartphones for a mobile wallet.

“Let’s be clear about something — we’re not just shoving a credit card on a phone,” Thompson said in his blog.

PayPal is already a major global force in online payments, with 100 million customers. While PayPal’s new payment technologies don’t rely on NFC, they do propose making in-store payments possible from any device and support GPS-based offers, according to Thompson’s blog. PayPal will even allow for customers to set up payments on credit after they’ve checked out.

Dozens of merchants got a sneak peak of the technology Wednesday at an event PayPal sponsored. The event was covered by All Things D, which was not allowed to take photographs, but posted a story. In addition to the payment methods shown in the PayPal video, that story said PayPal will allow customers to continue using plastic cards, issued by PayPal, for payment.

In an interview posted on AllThingsD, Thompson said the PayPal approach doesn’t require merchants to install new terminals, nor does it require customers to buy a new smartphone.

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Visa Digital Wallet Coming

Visa Inc, the world’s largest credit and debit card processing network, is designing a digital wallet that people can use to pay for things on the Internet or with their phones instead of with traditional plastic cards.

The network said on Wednesday it is collaborating with several large U.S. and international banks to create the wallet. Its partners include US Bancorp, PNC Financial Services, Regions Financial, BB&T Corp, Toronto Dominion’s TD Bank and the U.S. arm of Barclays PLC.

The “digital wallet” will store the banks’ customers’ credit and debit card account information, both for Visa cards as well as other cards. People can use the wallet to pay for things online or in stores, Visa said.

The network will also have to convince merchants to put a new “one-click” button on their websites, so that potential customers can use their Visa digital wallets to buy things by clicking the button instead of by manually entering all of their account information every time they want to make an online purchase.

Banks, mobile phone operators and networks like Visa are all trying to gain territory in the small, but high-potential market for U.S. mobile payments. Last week Isis, a separate mobile payments venture run by three of the top four U.S. carriers, said it had modified its initial goals and was now open to working with Visa and MasterCard as it introduces its own mobile wallet.

Jim McCarthy, Visa’s head of global products, told Reuters in an interview on Wednesday that mobile payments in the United States “will more easily take off” from people using their smartphones’ browsers to buy things online.

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