Square Beware, PayPal Goes Offline

square Square Beware, PayPal Goes OfflineeBay must have really dug Jack Dorsey’s vision for a frictionless point-of-sale system because CEO John Donahoe just announced that its PayPal unit is trying to do the same thing. Back in May, Mr. Dorsey, announced that Square, his mobile payments company, would be releasing Card Case, an app that attempted to reinvent the point-of-sale experience the same way Square reinvented mobile payments.

Card Cases stores your credit card info so that after swiping once with participating merchants, you can start a “tab” and pay with just a tap of your iPhone, iPad, or Android device. On the merchant side, businesses can use Square Register to spit out digital receipts, check daily transactions, and basically automate the checkout experience. On its quarterly earnings call, Mr. Donahoe said PayPal plans on targeting those same offline point-of-sale transactions.By the end of the year, PayPal will be testing the integration with “a major U.S. brick and mortar retailer,” says Forbes, with 20 national retailers expected by 2012. On the earnings call, Mr. Donahoe said:

“In this new retail world, consumers expect a seamless experience across physical stores, mobile, laptops or any Internet-connected device. In this new world, physical stores become just another point of access. Location alone is not enough. It’s not an advantage.”

Of course going after the offline market is trickier than all the seamless, frictionless rhetoric makes it sound. This early in the game, it isn’t always a faster than swiping a credit card or pulling out cash. This month, PayPal announced an Android service that lets users pay by tapping two phones together using near-field communications (NFC) technology. But on the call, Mr. Donahoe said one merchant referred to NFC as “Not for Commerce” because of problems with getting it to work.