Cutright, who served as PayPal's vice president of products for North America, is joining the company as it bids to export its technology beyond US shores.

The move can be seen as a direct riposte to Paypal, which last week unveiled PayPal Here, a a free app and fully encrypted triangle-shaped thumb-sized card reader, which turns any iPhone, and soon Android handset, into a mobile payment system that customers can swipe their cards through to carry out transactions. PayPal claims the company signed up more than 1000 businesses per hour in the first 24-hours after the launch of Here.

While the dongle mimics many of the features of Square's own card reading device, PayPal's global footprint proves a potent threat to Square's growth prospects on foreign shores.

PayPal says it service will be generally available in the US, Canada, Australia and Hong Kong next month, with more countries soon to follow.