NEW YORK - Square, which is square in shape and design, now has competition from PayPal??s new PayPal Here mobile, triangular-shaped credit card reader.
FastCoDesign.com reported last week on the launch of PayPal Here. The $4 billion in transactions Square has captured annually is likely an enticement, but PayPal is also trying to migrate its services. "We??re actually going after offline business in a serious way," David Marcus, vice president of mobile at PayPal, told the news source.
Like Square, the mobile credit card swiping device is a simple attachment and merchant application that allows iPhones and Android smartphones to collect credit and debit card payments and track receipts. Through the app, merchants can issue invoices and take pictures of checks and credit cards, to process payments even without the attachment, the news source writes.
The Wall Street Journal reports that last week EBay CEO John Donahoe announced the device at a San Francisco event. PayPal Here, which plugs into a headphone jack "and resembles a paper football," will compete with another San Francisco start-up, Square Inc., that has become popular method of accepting plastic with food truck vendors and taxicab drivers.
PayPal, however, is hoping to become "a full-on electronic wallet," notes FastCoDesign.com. Although PayPal Here is marketed to merchants, its consumer-facing app is expanding with features such as a "local" button, which allows consumers to pay for goods at retail locations that accept PayPal. The company has partnered with Home Depot to allow customers to use PayPal in its 2,000 stores. Marcus told the news source that more merchants would be added as major retail partners later this year.
Donahoe said that PayPal has become eBay's strongest business unit in recent years, notes The Wall Street Journal, and it could become the company's biggest division by revenue in a few years. PayPal revenue grew 28% to $4.4 billion in 2011, accounting for 38% of eBay's revenue that year.
PayPal will give away its PayPal Here credit-card reader for free and targets smaller merchants. The newspaper says that PayPal will charge a 2.7% fee on credit and debit card transactions, compared with Square's 2.75% fee. PayPal will also give 1% cashback to merchants who later use a PayPal debit card to purchase items for their business.