It has so far been unclear which technology will win the mobile payment race, but this week PayPal’s Beacon announcement gave a boost to Bluetooth Low Energy’s chances.

The Beacon service uses Bluetooth Low Energy (BLE) instead of wifi or 3G to communicate with shoppers’ phones. It requires retailers to plug in a small BLE device which will communicate with smartphones and the retailer’s payment terminal.

The PayPal Local service - whereby shoppers check-in to a shop using their mobile and then pay via PayPal - will be made more seamless by BLE, the company says.

When using PayPal Local shoppers check-in to a store by sliding a pin on their mobile screen to let the store assistant know they are there. When they want to pay, the assistant will look for their profile picture on the shop’s own mobile device, enter the amount and press confirm.

BLE allows devices to communicate in the same way as wifi, but more directly - the shopper doesn’t have to open the PayPal app to check-in, meaning the payment process can be totally hands-free. Their phones will automatically check-in to a store when they arrive. They will still need to speak the cashier before money is removed from their account, and will be able to choose which shops they enable a complete hands-free experience for.

Given that Apple’s newest operating system iOS7 will include similar technology, this is happy timing for PayPal - iPhone and iPad users will soon be able to use BLE. The banks, mobile operators and payments processors are still stalling on NFC, and it may well turn out that NFC triumphs now that so many retailers have invested in contactless card readers. But these BLE developments show there are other technologies hot on NFC’s heels.