Innovation alert: Paypal advances the digital wallet

According to USA TODAY, PayPal just launched new technology that makes it possible for consumers to pay in stores using a smartphone. By using a four digit payment code or a QR code, shoppers will now be able to make purchases without swiping a credit card. Earlier this year, PayPal released two other innovations: an app that sends consumers offers from retailers based on where they are located, and a gadget called Beacon that enables retailers to automatically identify and authenticate PayPal users when they enter a store.

The emergence of the digital wallet has been fodder for industry chatter over the past couple of years. As it becomes a reality, the implications are significant. The ability to access loyalty cards, payment methods and more via smartphone has the potential to revolutionize how consumers shop, spend and manage their money.

From a consumer engagement standpoint, PayPal’s recent innovation is incredibly exciting. This type of connectivity represents a wealth of opportunities for retailers to engage consumers with loyalty programs and on-demand offers.

For credit unions, this development represents both a threat and an opportunity.

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