PayPal introduces Square rival, 'PayPal Here'
As expected, PayPal announced its mobile payment system for small businesses. PayPal Here charges businesses a flat rate of 2.7 percent per credit card or PayPal transaction, a .05 percent savings over rival Square's mobile payment system.
Click here to watch a video about PayPal Here.
"Merchants are also given a business debit card for quick access to their funds and 1 percent cash back on eligible purchases--which means if you use the debit card, your fees are actually just 1. percent," wrote David Marcus, vice president of mobile at PayPal, on the company's blog.
PayPal Here is a small, triangle-shaped dongle that attaches to a phone or tablet's audio jack. Users can then swipe credit or debit cards through the card reader or use the phone's camera to scan and process cards and checks.
"The key differentiator is that it comes from PayPal, a trusted brand in the online payments industry with more than 100 million customers around the globe and years of proven payment innovation, driving growth for millions of businesses globally," wrote Marcus.
PayPal Here will be available for all businesses in the United States, Canada, Australia and Hong Kong next month and in other international markets in the coming months.
"PayPal's move goes to show just how much the bricks vs. clicks war is escalating," said Yankee Group Senior Analyst Nick Holland in a statement. "PayPal is causing seismic shifts in the payment industry, with the potential for disruption of not just traditional card brands and issuing banks, but for hardware manufacturers. While we'll need to see market acceptance before we can determine the invasion of e-commerce players is actually under way, should PayPal succeed here, it may open the floodgates for other Internet-specific companies to hit the streets. Facebook? Amazon? Apple?"
PayPal boasts more than 104 million active users worldwide, with more than 8 million merchant partners. In 2011, PayPal handled more than $4 billion in mobile payments. This year, eBay CEO John Donahoe predicts the company will top $7 billion in mobile payments.
Startup Square kicked off the market for accepting credit card payments through an audio jack plug-in. Over one million merchants now accept credit and debit card transactions through Square, and the company now processes over $4 billion in payments annually.
- read the PayPal blog
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