To date, the company has partnered with Home Depot and Office Depot to test its point-of-sale (POS) service and plans to get 20 more major retailers on board by the end of the year.
How it works
At checkout, consumers verify the total, enter their cell phone # and four-digit PIN, then walk off with a paper receipt (a digital receipt is stored in their online account).
The digital wallet is linked to a smartphone app, which lets consumers store all their credit cards, gift cards, frequent flier miles and more in one location.
Unlike a "mobile wallet," which is tethered to an access device, or phone, Anuj Nayar, director of communications for PayPal, pointed out that in being cloud-based, any data stored in the wallet is safe and sound.
"Even if a device is compromised, none of your financial information is stored on your device, it's safe in the cloud," he said by phone.
What it means for you
Because PayPal users share so little—email addresses and passwords for online transactions and PINs and cell numbers for in-person purchases—that makes it easier for PayPal to share other info it collects with retailers, a spokesperson told Barr.
Such info might include where consumers shop, what they like and recent product searches.
This could translate into billions for PayPal, a marketing field day for retailers and a headache for you, if you opt in. Consumers can elect not to share anything at all.
If you do opt in, know that sale alerts popping up on your cell whenever you walk past your favorite stores will get annoying quickly and even tempt you to go overboard.
Should you be worried?
We've noted that the digital wallet makes it easy to drain your accounts quickly, making you susceptible to drunk buys, impulse buys and identity theft.
But on the plus side, you could receive some excellent deals.
Per Nayar: "The definition of an anonymous shopping experience is walking through a supermarket," he said. " The whole point of targeted deals is that you won't get spammed. You'll only get offers from the retailers that you want and you have full control over what, when and how many offers you receive."
Now take a tour of PayPal's awesome mobile wallet tool >
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