Processing credit cards can eat up a good chunk of businesses' profits. Fees add up quickly, which is one of the reasons why some places still impose minimum purchase amounts for credit card transactions. With this in mind, PayPal has announced that it is offering free mobile card processing through its Cash for Registers program for the rest of the year.
In order to sign up for the free service, PayPal is requiring companies turn in their old point-of-sale system in favor of PayPal's Here, or any other POS offering that integrates PayPal's technology. Once 2013 is over, fees will go back to normal, but for a business that runs a lot of credit cards, the amount saved in the remainder of 2013 could be quite large.
PayPal Here is designed to compete with Square and other similar mobile offerings. Merchants sign up for an account and attach a small reader to a mobile device, which allows card processing anywhere. PayPal charges 2.7 percent for each transaction, which slightly edges out Square's 2.75 percent. Of course, that is the fee after the free period runs out.
As part of this program, PayPal will make participants known to its entire customer base, which is a nice bit of advertising.
For companies looking to lean up the way they take payments, this is a smart move. Square will certainly need to respond, as six months of free service, and a slightly lower rate overall will make it difficult for it to compete with its current offerings.
Businesses interested in registering for PayPal's Cash for Registers can do so at CashforRegisters.com.