On the heels of launching a Google Wallet competitor in Home Depot, PayPal announced intentions to stake its claim in the mobile credit card reader business refined by Square. PayPal officials demonstrated their triangle-shaped "PayPal Here" device for journalists attending Austin's SXSW festival earlier this month. Merchants can swipe a customer's credit card for real-time deposits into a linked PayPal account, for a flat transaction fee of 2.7 percent.
In a statement to reporters, company officials confirmed that a small group of about a thousand PayPal merchants have started testing the new device. Prospective users can add their names to a virtual wait list for free PayPal Here readers on the company's website. While PayPal will only support Apple products during the service's trial run, company officials assured reporters that an Android version of their payment app would launch after the current round of user testing ends.
Magnetic stripe reader complements PayPal's existing small business services
Like Square, PayPal's mobile credit card reader plugs into the headphone jack of an iOS or Android device, such as an iPhone, and iPad, or a Galaxy Nexus smartphone. On Twitter, PayPal Here's triangular shape provoked comparisons to the Sabre Pyramid -- the doomed tablet computer from television series "The Office." However, in Austin, journalists remarked that the unusual shape kept the device from tilting or spinning during a card swipe.
PayPal Here rounds out a suite of mobile payment solutions embedded in the company's smartphone application. For instance, registered PayPal users can instantly issue payments to each other using a short range Bluetooth connection. Qualifying merchants can also process payments from non-PayPal customers by manually keying in credit card numbers or by taking a digital photograph of a buyer's credit card.
PayPal merchants can access settled funds instantly
Although select Square merchants can qualify for next-business-day deposits of settled funds, PayPal spokesman David Marcus highlighted PayPal Here's real time payment platform. Marcus told reporters that merchants can use PayPal's cash back debit card to access customer payments immediately, and at a discount. PayPal officials say they expect to distribute card readers in United States, Canada, Australia and Hong Kong in about a month.