PayPal is targeting small businesses, service providers, and casual sellers on the move with its new PayPal Here service which allows vendors to process a variety of payments including checks and cards using their mobile phones.
The new service, unveiled yesterday, includes a free app and encrypted thumb-sized card reader, which allows merchants with an iPhone, and later Android smartphones, to process payments.
Merchants can accept payments by swiping cards in the card reader, scanning cards and checks using their phone cameras, or by entering card information manually into the app, the eBay unit said. They can also send an invoice and set payment terms, and accept PayPal payments from the app. The check facility is however only available in the US.
An iPhone version of the card reader and merchant app is now available to selected merchants in the US, Canada, Australia and Hong Kong, with general availability in those countries scheduled for April. PayPal also plans to have an Android version of the merchant app by then. It will announce the availability of the service in more countries soon, it said.
Merchants pay a flat rate of 2.7% for card swipes and PayPal payments, while checks will be processed free of charge. Scanning of cards or typing the card information will be charged extra. PayPal Here merchants will also receive a business debit card for access to cash and 1% cash-back on eligible purchases.
PayPal will be competing with mobile payment systems from other providers such as Square and Intuit.
Vice president of mobile at PayPal David Marcus said that the key differentiator for PayPal Here in comparison to other small business mobile payment services is that it comes from a trusted brand in the online payments industry, with more than 100 million customers globally.
"With PayPal Here, we are now able to serve as a one-stop shop for online, offline and multi-channel small businesses," Marcus said. Merchants can download the PayPal Here merchant app, sign up, and start accepting payments immediately, and they will receive funds directly into their PayPal account regardless of whether the sale was online, mobile, or through PayPal Here, the company said.