New PayPal app allows users to pay with QR codes

PayPal today announced a new iteration of its offline payment system with Payment Code, an app that allows users to pay for goods and services in any shop without reaching into their wallet for a credit card.

In theory, the customer will be able to pay by checking into the app in-store, which will then load a QR code for the cashier to scan. However, this only works if the participating store has compatible barcode scanners.

PayPal is issuing payment devices to retailers to allow customers to scan the QR codes, but in the meantime the app also works without the scanners by providing the customer with a four-digit code to be entered into the shop's Chip and PIN machine.

But the e-commerce giant seems to realise that this doesn't sound all too tempting from a convenience point of view. In order to get users on board with the app, PayPal is offering the ability to redeem special offers, gifts cards and other reward schemes accessible through the app.

In the US, PayPal has partnered up with large retailers like Home Depot and payment processor Discover Financial Services in order to roll the service out over as wide an area as possible.

The fully-fledged offline payment method follows a number of baby-step developments over the last year. PayPal earlier unveiled a mobile app that sends users offers based on their location, and another, called Beacon, that automatically identified PayPal users when they walk into a store.

With Beacon, PayPal promised to "reinvent today's in-store shopping experience by making it simpler, faster and richer for consumers, while providing retailers with more ways to differentiate themselves from their competitors." They even experimented in the UK, using facial recognition technology to make payments in Richmond, London.

Don Kingsborough, the executive in charge of leading the company's offline expansion, believes Payment Code is the final piece of the puzzle. He said "We have closed the loop, allowing all this to happen in millions of locations where the consumer already shops."

PayPal is hoping that once the physical architecture is put into place, the system will gain greater traction, seeing more and more users utilising the service.

The announcement comes two weeks after PayPal acquired global payment platform Braintree for a total of $800 million (£496.6 million).