Long rumored to be working on a mobile payment system to take on Square, PayPal, the online payment company owned by eBay, officially announced today PayPal Here, a new mobile payment system that, through the combination of hardware and software, aims at helping small business owners complete transactions on the go.
With a blue dongle that fits into the iPhone’s headphone jack port and an app in the works for iOS and Android devices, PayPal Here, similarly to how Square works, allows users to swipe their credit cards and confirm transactions on a mobile device’s touch screen. PayPal Here’s biggest advantage over the competition, as you can imagine, is the 100 million customers in 190 countries already using the service – Square, despite being the first company to really disrupt the mobile payment scene with its popular hardware accessory, can’t boast the same numbers of PayPal, which is still the leading online payment solution worldwide. With this in mind, PayPal has created a system that accepts credit and debit cards, PayPal, and checks; the company is collaborating with VISA, American Express, Discover and MasterCard to provide support for credit and debit cards, whilst also enabling users to invoice from the app, and track cash payments.
While taking checks and issuing invoices are free of charge, all card swipes that will happen through PayPal Here will have a 2.7% rate with “no hidden fee or commitments”. This is very similar to Square’s standard 2.75% commission, but being new to this market, PayPal still doesn’t have all the options for merchants that Square is offering. Recently, Square set out to reinvent old POS systems with the iPad, revamped its iOS app completely, and launched a brand new Card Case app to facilitate virtual transactions for its users.
PayPal Here looks very straightforward for now, albeit it wouldn’t be a surprise to see the company rolling out new functionalities quickly now that the product has been unveiled. The free, encrypted card reader can accept cards, and users can also rely on a phone’s camera to scan checks and process cards. The app, demoed today and shown in a promo video, uses a typical grid interface to choose between various payment methods, and enables customers to sign digitally using their fingers. The app can deliver receipts wirelessly, and it appears it will also let merchants set up various items in their database for quick access when entering a new transaction. Funds are “instantly available” in a PayPal account, and there’s also a map to show where a transaction was completed.
In another promo video that we have embedded after the break, PayPal is obviously touting the new service as the only one that accepts the most payment systems with the convenience of something that’s portable and secure. Admittedly, the fact that PayPal already has millions of users and that is a well-established brand in several countries will help in making Here gain traction among consumers and business owners. On the other hand, though, Square has been making some terrific innovations in the mobile payment space lately, and although still limited to the US, it comes with a richer catalog of apps and tools to help consumers and business owners tailor their digital transactions (and wallets) to their needs. It will be interesting to see how this industry will evolve now that the biggest player has decided to come up with a solution that, while very similar to Square, has a chance to raise general awareness and curiosity among users.
More information about PayPal Here can be found on the official website. PayPal Here is available today for select merchants in the United States, Canada, Australia and Hong Kong. More merchants will be added next month, and the service will launch in more countries soon.