November 19, 2012

Guitar Center, a national chain of musical instruments store, is the latest major national retailer to start accepting PayPal mobile payments in-store, the company announced today. The chain worked with AJB Software Design, Inc., a payments solutions provider, to integrate PayPal payments into its point-of-sale system. Guitar Center is now able to process and authorize PayPal payments in real-time with AJB's Retail Transaction Switch, allowing customers to make purchases using their mobile phone or PayPal card with their PIN.

The move to accept PayPal was a natural step for a retailer that attracts the same younger demographic that is drawn to PayPal, Guitar Center's Frank Hamlin, executive vice president of marketing and e-commerce, said during a phone interview with Bank Systems & Technology. "The typical customer for musical instruments tends usually sells their used instruments and they build up a PayPal balance that way. So we thought it [adding PayPal in-store] made good sense," Hamlin added.

[See Related: Visa, PayPal Top Mobile Wallet Report ]

To make payments in-store with PayPal, Guitar Center customers have to register their PayPal account for in-store payments. They can then enter their mobile number and PIN at the register to make purchases or swipe their PayPal card. Coupons and special offers are automatically applied to the transaction, and AJB's Pat Polillo, VP of sales and marketing pointed out, and the merchant never collects the customer's financial information.

AJB had been talking with PayPal since about 8 months ago to integrate the payment provider's systems into AJB's solutions for large-scale retailers like Guitar Center, Polillo said. They've been working for about 4 months to with PayPal and Guitar Center to test and deploy the PayPal point-of-sale capability and integrate it with AJB's and Guitar Center's systems. "This was an opportunity for us to get our toes wet and how it [PayPal in-store payments] will work for us and our customers," Polillo explained.

Guitar Center has been changing its store plans to become more open format, according to Jeff Steinmetz, Guitar Center's VP of store systems. "This means a more casual environment with quicker transactions. Enabling mobile payments is a part of that," Steinmetz said.

ABOUT THE AUTHOR
Jonathan Camhi is a graduate of the City University of New York's Graduate School of Journalism, where he focused on international reporting and interned at the Hindustan Times in Delhi, ...