On March 15, 2012, PayPal Inc. took a swing at mobile payment startup Square Inc. and others offering smart-phone payment solutions when it introduced its PayPal Here mobile payment solution.
The new payment service includes a free app and an end-to-end encrypted card reader that attaches to Apple Inc. iPhones and Google Inc. Android smart phones to allow payment acceptance anywhere. PayPal said the new service accepts more types of payments than any other solution on the market today.
ROAM Data Inc. was reportedly the first to introduce a payment dongle for mobile phones in 2010. Its ROAMpay is compatible with all mobile phone types. Square Inc. introduced its competing swipe device shortly thereafter and has gained media attention and market traction. Several other companies also offer payment solutions that use smart phones and tablet computers for payment acceptance.
PayPal said its app, unlike those of its competitors, will accept not only credit cards but will allow merchants to use a phone camera to accept and process checks, invoice from the app, allow manually keyed in or scanned card information, track cash payments and accept PayPal payments.
PayPal is offering a flat fee of 2.7 percent per transaction. Square's fee is 2.75 percent. PayPal is also offering merchants a debit card for quick access to their cash. The card offers 1 percent cash back on purchases. "If merchants use the debit card for purchases, fees effectively come down to 1.7 percent," PayPal said.
In addition, PayPal said all transactions offer end-to-end encryption, and the company is providing full-time customer support around the world for the service. PayPal Here will soon be available to merchants in the United States, Canada, Australia and Hong Kong. The company plans to introduce the service to more countries soon.
David Marcus, PayPal's Vice President of Mobile, said, "We've heard small businesses loud and clear. They don't want to miss sales opportunities because they can't accept the payment type that their customers want to use.
"They want quick access to their money, a reliable card reader, and one transparent, low fee to process these payments. I'm thrilled to launch PayPal Here because we've been able to bring all of these key features together into a product that's so simple to use."
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