PayPal reveals mobile credit card reader, undercuts competition

By on March 16, 2012, 5:30 PM

Earlier this week, PayPal mentioned plans to compete against Square, Intuit and other credit card payment processors. The company aims to become yet another way to process credit cards on the go for small businesses, offering a mobile card reader and competitive processing rates.

Yesterday, the company unveiled its new PayPal Here service which includes a free card processing app and a triangularly-shaped card reader which attaches to most Android and iOS mobile devices. The device connects to your phone or tablet and allows you to swipe a credit card at any location where you have an Internet connection.

Although hardly a new concept, PayPal intends to rock the boat with a lower transaction fee than its competition. The company is keeping things simple with no monthly fees and a universal 2.7% transaction fee. This means no matter what card you swipe -- even American Express -- you'll be charged exactly 2.7% of the total. 

Currently, mobile card processing pioneer Square, charges a universal 2.75% transaction fee. Another major player, Intuit's GoPayment, charges 2.7% per transaction but has higher fees for American Express.

PayPal Here will be available in the U.S., Canada, Australia and Hong Kong. It still hasn't launched yet, but a handful of companies are said to be testing it.

PayPal's move into the mobile credit card processing arena follows a recent brand refresh and a new partnership with the Home Depot. The International home improvement retailer recently began accepting PayPal payments at its POS terminals in the U.S.

Although the Home Depot is the only big-box retailer that accepts PayPal directly, users can still sign up for a PayPal debit card which can be used just about anywhere a credit card is accepted.

User Comments: 7

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lawfer, TechSpot Paladin, said:

With NFC surely becoming a thing in 2013, I'd classify this idea as a yet another failed business strategy.

howzz1854 said:

this is such a GREAT news for small business people who want to start charging credit cards but are always bullied by transaction payment processors.

i would totally expand my wife's home business if i can get my hands on one of these!!

PinothyJ said:

This is amazing!

Credit card institutions do not need ANY more money than they are already reeling in...

Guest said:

They're only now embracing plastic card-reading tech? NFC and mobile banking is the way to go.

Even if this weren't a fail from the start, I refuse to use anything from paypal; they'll probably just lock my account and make interest off my money for 180 days, as per usual.

Guest said:

PayPal are desperate, and a plastic card reader isn't going to save them from mobile banking apps, NFC, and most of all, their own oustandingly horrible and universally reviled customer service. PayPal as a brand has slowly been poisoned by their own greed and lack of empathy when they screw over their own customers on a regular basis.

PayPal is a cancerous business that only gets to insert itself in the payment business in the United States, because US banks are even more horrible and reviled.

Guest said:

this is a great idea but its coming from the wrong company, and yes paypal does practice unethical business practices. they lock ur account for months while they earn interest and then they say "ahh yes your account is clear your good to go"

i would almost recommend this to small businesses but this is a double edged sword.

webwalker said:

yet one more scheme by paypal to rip people off. some one please put these jokers out of business .

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