PayPal unveils competitor to Square's credit card reader
EBay-owned payment giant PayPal is looking to further expand its presence beyond online transactions, and announced on Thursday it will be introducing a credit card-reading smartphone attachment aimed at small retailers that will be in direct competition with existing solutions like Square.
The new service, called PayPal Here, is part of the company's gradual move into brick-and-mortar stores and will target small businesses that do not currently have comprehensive payment systems in place, reports The Wall Street Journal.
Since PayPal's inception in 1998, the company's online money transfer service has become the de facto payment solution for many websites, but the eBay subsidiary has been gradually expanding into the physical space.
“What consumers are looking for is the ability to shop anytime, anywhere,” said eBay CEO John Donahoe. He added that with PayPal Here, a merchant needs only a smartphone to accept payments.
The addition of the new triangular credit card reader extends the service and works exactly like Square's offering, which plugs directly into a smartphone's headphone jack. Unlike Square, however, PayPal's reader currently only supports the iPhone, though an iPad-native app as well as Android versions will be available soon.
Along with the card reader, merchants can manually enter a customer's credit card information, scan cards with the iPhone's camera or email a customer an invoice for later payment. In addition, U.S. users will be able to take pictures of personal checks to receive payment.

The service will take a 2.7 percent commission for each credit card swipe or PayPal transaction, while check payments will be free. Interestingly, merchants who scan or manually input credit card information will have to take a 3.5 percent hit plus a 15 cent fee per transaction.
PayPal Here has already rolled out to select merchants in the U.S., Canada, Hong Kong and Australia and should be available to the public within the next few weeks.
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Comments
The service will take a 2.7 percent commission for each credit card swipe or PayPal transaction, while check payments will be free. Interestingly, merchants who scan or manually input credit card information will have to take a 3.5 percent hit plus a 15 cent fee per transaction.
That is pretty typical since charges without the card in hand run a higher risk of fraud.
It making me I'll just thinking about them.
These card readers are clever, but these are mostly suitable for micro businesses. If you have an inventory of more than 20 items, I don't think how this would work. What about a scanner? POS systems are expensive because they can handle the front of the store and also the back end office. I still need a computer with the idevice correct? If a computer is necessary, then why not go with a computer based POS? And what about debit bank cards? Is there an iOS turnkey POS system?
I agree with you but these micro businesses benefit greatly from these devices. Some friends in NYC told me that nowadays many street vendors around Times Square and Chinatown are using iPhones with Square readers so they can accept Credit Cards.
Can I cue up Huey Lewis' "it's hip to be square"
Personally, I'd prefer to support Square ( the innovator ) rather than PayPal ( the copycat.)
eBay ( who owns PayPal ) sat on their butt when they should have innovated. They never integrated Skype into eBay which could have been revolutionary, instead they sold it bc they were to clueless what to do with Skype.
I've been calling for my clients to switch over to Dwolla. Fantastic experience thus far.
The addition of the new triangular credit card reader extends the service and works exactly like Square's offering, which plugs directly into a smartphone's headphone jack.
Square is involved in a patent dispute with the guy who they asked to design their card reader, who filed a patent with just his name on it (actually a bunch of patents). Of course detailed plans for such a device had been published openly on the internet years earlier, so I don't understand how anyone ended up getting patents on it! Probably PayPal is licensing these patents.
www.paypal.com/here
Unlike Square, however, PayPal's reader currently only supports the iPhone, though an iPad-native app as well as Android versions will be available soon.
That didn't take long... or you guys misread something...
"Free card reader and app.
Works with Apple iOS and Android products."
https://www.paypal.com/webapps/mpp/c...-reader#tabs-5
Have none of these companies thought to make a chip and pin based product? Thats used throughout the UK and Europe.
iZettle uses a chip based system, but does not allow pins. Mobile phones won't allow it. You must sign your name. How antiquated? iZettle is nice, but seems to be even more limited in its usefulness than the Square Register.
https://www.izettle.com/help/why-doe...le-use-pins-2/
PayPal freaking sucks. I don't have to tell any stories you all know it.
It making me I'll just thinking about them.
+1, I refuse to use them. Too many security breaches in the early years, a horrid interface (took forever to help a friend figure out how to change his address when he moved), and there's that generally slimey feel from being associated with eBay. I've actually forgone purchases when the only option was PayPal.
I use Square and really like the aesthetic. Also, they will transfer your funds into your linked bank account the next day now. PayPal takes two to three days. But Square is charging .05% more. I may add this to my bag, but only if it's a big job and I want to save some money on the transaction.
Do you literally mean 0.05%? Or do you mean 5%? 'Cause I'm sorry, if it's 0.05%, big whoop. On a $100 transaction, that's an additional 5 cents. On $100,000 in sales, that's an additional $50. In other words, it's costing you more to think about it and to juggle PayPal and Square than to just stick with Square!