PayPal Here iPhone Mobile Payment System Challenges Square

PayPal Here iPhone Mobile Payment System Challenges Square

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It looks like Square and other mobile payment solutions has a pretty big competitor entering the space. PayPal Here was just announced and the iPhone app can work in tandem with a credit card dongle to accept payments in real life.

The target market is mostly small businesses, particularly those that are mobile. When they’re reading to ring up a customer, they simply tally up the order in the app–either by selecting items they’ve added to their inventory or simply punching in the full amount–and then select the method of payment. If they opt for a credit card (or presumably debit card too), you use the swiper in the triangle-shaped credit card dongle. The customer adds a tip (if desired) and signs right on the iPhone’s touchscreen. Yes, that means handing over your iPhone to your customer.

The PayPal Here app can also be used to accept payment via cash, check (using the iPhone’s camera), invoice, or PayPal. I imagine they’d have to sign into their PayPal account to get it to work, which could be a little time-consuming. You’ve also run into a snag if someone has a chip and PIN-enabled credit card, since the swiper only seems to work with the standard magnetic stripe.

In any case, the initial rollout is planned for USA, Australia, Hong Kong and Canada. Merchants are charge 2.7% on card swipes and they can get a business debit card with 1% cash back on eligible purchases. The little dongle, which simply plugs into the headphone jack on your iPhone, is free upon request.

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