Have Photo ID, Shop in Australia Under PayPal’s Empty Hands System

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By Vittorio Hernandez | November 15, 2012 10:30 AM EST

With the Christmas shopping season about the begin, Australians would have an alternative way to purchase goods without bringing cash or credit cards. All they need is their photo ID under a new in-store payment system announced by PayPal on Wednesday.

Under the payment system, Australian shoppers must open their PayPal mobile app and check into the store they are visiting. This would result in their customers' PayPal profile being seen by store staff on their point-of-sale terminals. To complete a sales transaction, the only requirement is to charge the purchase by tapping the customer's photo ID and inputting their phone numbers and PIN linked with their PayPal account.

The application programming interface (API) would address the current problem that few retailers have facilities to accept PayPal payments since the API works with existing payments' hardware which would link with PayPal's 4.6 million users in Australia.

Among the participating retailers in the PayPal scheme are Sonoma Bakery, Guzman Y Gomes, Glue Store and Crayons.

Outside Australia, the new PayPal product called Empty Hands is under trial in several stores in the U.S., including Home Depot and Abercrombie & Fitch.

"I quickly found the value proposition in not having to fumble through your phone or your wallet - you could actually pay with your empty hand," Australian Financial Review quoted PayPal Australia Managing Director Jeff Clementz.

Besides that advantage, Mr Clementz said that Empty Hands would hasten transaction times for shoppers, protect their personal information and help retailers understand better and market directly to their clients.

PayPal charges the merchant a standard rate from 1.1 to 2.4 per cent plus 30 cents per transaction which is similar to credit card rates.

The introduction of the digital wallet seeks to boost further the volume and amount of sales made via smartphones which has drastically jumped to $5.6 billion from only $155 million two years ago, according to Nielsen's latest report.

The Wednesday announcement is just part of the sales blitz that PayPal has scheduled in Australia. At the end of the week, PayPal will officially roll out Empty Hands at a Glue Store, a fashion outlet on Pitt Street in Sydney. After that, PayPal will introduce it at other participating retail outlets in Victoria, New South Wales and Queensland before the yearend.

PayPal is also eyeing more participation from bricks-and-mortar stores in Australia to provide a deeper engagement between these type of retailers and shoppers.

"Today when customers go into a store you don't know they're there - online you know how much time they spend on the Web site. Digital wallets provide retailers with the opportunity to know (consumers) are there and provide better services and coupons and deals," Mr Clementz added.

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