PayPal has unveiled its own direct equivalent to Square’s reader. PayPal Here’s triangular reader lets anyone with an iPhone take card payments and, as expected, PayPal payments. It claims an edge over Square in sheer variety of payment types, supporting options like debit cards, manually entered or scanned card info, and even check scanning in the US.
A dedicated merchant app handles the transactions. An upcoming update to the free PayPal app will give customers both a way to find places that take PayPal Here as well as flag the store when they’re ready to pay. Stores will only need to verify the name and picture to clear a sale at that stage.
The business model is similar to Square’s in taking a 2.7 percent cut on each transaction rather than asking for up-front costs or monthly fees. As a possible edge, shops get their own debit card with a one percent cashback deal that can cut the rate to 1.7 percent.
PayPal Here is active now for Australia, Canada, Hong Kong, and the US for certain stores. Everyone in those countries will have access in April. More countries will come over time, PayPal said, as will an eventual Android port.
The service isn’t the first to try and challenge Square but is the first based truly closely around the startup’s model. Both strategies focus on small or very mobile businesses that either can’t justify the costs of a conventional payment system or which tend to operate in areas where they wouldn’t have access to a plugged-in payment reader. PayPal has been experimenting with real-world payment systems at places like Home Depot, but it has been mostly left out of the space as Square and even establishment companies like VeriFone have entered the arena.
