PayPal launches Square rival

PayPal launches Square rival

PayPal has taken the wraps off its Square rival, offering small businesses a free dongle and app that allows them to accept card payments with their mobile phones.

PayPal Here consists of 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.

However, the company stresses that, unlike rivals Square, Intuit's GoPayment and Verifone's PAYware, its system offers far more than just card swipe-based payments. Using technology licensed from mobile payments start-up, merchants can also accept payments by scanning cards and cheques using their phone cameras, or manually entering information into the app. They can also send invoices and set payment terms directly from the app.

A refresh of the PayPal iPhone app means users will also be able to use the "Local" feature to find nearby businesses that accept PayPal Here. Once the customer is ready to pay, they can notify the merchant by a quick tap on their mobile phone. Merchants can use PayPal Here to accept the payment by simply referencing the shopper's name and picture. Similar to Square's Card Case app, the feature eliminates the need for any physical transaction at the point of sale, as shoppers are recognised and handed their goods when they arrive at the store.

The eBay unit will charge a flat rate of 2.7% for card swipes and PayPal payments. In addition, every PayPal Here merchant will receive a business debit card for quick access to cash and one per cent cash-back on eligible purchases - effectively cutting the fee to 1.7%. Square charges 2.75%.

PayPal is using its existing global footprint to steal a march on Square and its other North America-based rivals. The service will be generally available in the US, Canada, Australia and Hong Kong next month, when the Android version will also be launched. More countries will follow.

David Marcus, VP, mobile, PayPal, says: "We've heard small businesses loud and clear. They don't want to miss sales opportunities because they can't accept the payment type that their customers want to use. They want quick access to their money, a reliable card reader, and one transparent, low fee to process these payments. I'm thrilled to launch PayPal Here because we've been able to bring all of these key features together into a product that's so simple to use."

Comments: (4)

A Finextra member
A Finextra member 16 March, 2012, 10:35Be the first to give this comment the thumbs up 0 likes

I really don't think I want to comment on this.

A Finextra member
A Finextra member 16 March, 2012, 13:15Be the first to give this comment the thumbs up 0 likes

I wonder how it stacks up against mobile PayTron?


A Finextra member
A Finextra member 16 March, 2012, 14:12Be the first to give this comment the thumbs up 0 likes

If, as shown in the video, the alternative is a barcode, it's Paytron every time for me.