PayPal launches PayPal Here and challenges Square. This new dongle has been designed for small merchants and allows them to accept all means of payment.
PayPal Here enables mag-stripe debit or credit card payments (Visa, MasterCard, Amex, Discover), PayPal payments, cheque processing (through image capture) and, even, cash payments based on a cash tracking module (as with traditional cash registers). If the merchant forgets to carry his dongle along with him, he can still rely on a copy of the payment card or type-in the payment data.
This dongle is mostly intended for small merchants benefiting from a PayPal account (unlike final customers): marketplaces, repair or delivery services, or other door-to-door salesmen. A flat rate of 2.7% is charged for card transactions (less expensive than Square and similar to Intuit GoPayments). The iPhone app relies on Card.io software.
This same app also allows its user to choose whether he wants a bill to be due later (5, 10, 20 or 30 days). In addition, equipped merchants will a PayPal debit card enabling them to spend the funds sent on their PayPal account or withdraw cash right away; this card offers a 1% cash-back.
As usual, PayPal relies on its brand and ability to invest. The dongle
is currently being beta tested and should be rolled out simultaneously
in the US, in Canada, Hong-Kong and in Australia. It also plans to make
it available in the UK and in other, not yet disclosed, EU countries.
This product obviously aims at challenging Square which, despite its
success, remains hindered by its status as well as its start-up’s means
as opposed to PayPal. Most of all, PayPal intends to design an offer
that properly fits its own opinion of the future of payments, as
unveiled through its announcements regarding PayPal Wallet.
As of France, the next step would be to propose a smart card based
version of PayPal Here. PayPal can rely on its fame, its 100 million
active users worldwide (including 17 million mobile users), as well as
on its implantation in-stores on four continents.