PayPal is allowing external developers access to its in-store payments programming interface in a bid to generate clever ideas around its new Beacon service.

The company announced yesterday it will roll out PayPal Beacon, which uses Bluetooth Low Energy technology, next year and says it wants developers to help it come up with interesting ways of developing the service.

PayPal Beacon will require retailers to plug in small Bluetooth devices that communicate with shoppers’ phones in a similar way to wi-fi. Once the retailer has done this, shoppers will be able to pay without taking their phones out of their pockets by simply instructing staff to take payment from their PayPal account.

PayPal said in a blog: “We’re inviting developers to submit their ideas at and get access to the APIs and a free test version of the PayPal Beacon device before we roll this out.”

The company said it has considered several types of technology to enable hands-free payment. “We’ve decided that there can’t be anything much better than not doing anything at all. Just walk into a shop, and, like magic, when you’re ready to pay, your money is transferred securely. We started to play with geo-location leveraging GPS and wi-fi. We played with geo-fences in iOS. But none of these solutions met our standards.”

It said traditional geo-location requires phone signal and good data flow, and that often the indoor resolution isn’t good enough, and having it on for long periods of time reduces battery life. Geo-fencing, it added, can only be used with a limited number of locations.