Money Matters – PayPal Enters Mobile E-Commerce Arena

Fresh off of a series of announcements from Square, the point of sale mobile application and service, e-commerce giant, PayPal has stepped into the mobile e-commerce arena with its sights set on trying to be Goliath to Square’s David.

PayPal announced PayPal Here this week, and is positioning itself to go head-to-head against Square in the mobile payment small business category with a mobile app and card reader that accepts credit and debit card payments.

Credit card and check transactions can be accepted by capturing a photo of the check or card in question, and customers select a tip amount and sign for the transaction directly on the phone’s screen.

While the PayPal Here app is designed to be used hand in hand with the card reader, the app can also be used to accept checks, keep track of cash transactions, and accept credit card transactions in situations where you might not have your card reader present.

How does PayPal stack up against Square?
PayPal Here is available for iPhone and Android, while Square is available for iPad, iPhone, and Android.

PayPal Here takes a 2.7% cut for each credit card or PayPal transaction, while Square takes a 2.75% cut for each credit card transaction.

PayPal Here is available in a limited release to 1,000 merchants who use iOS devices. Sam Shrauger, vice president of global product and experience, said the company will roll it out to the public over the next month or so, at which time he said an Android app will also be available.

“One of the game changers PayPal could offer would be to accept mag stripe and EMV in the same device,” Andy Schmidt, research director at consulting firm CEB TowerGroup, said, referring to the so-called “chip-and-pin” cards that are ubiquitous in many other parts of the world. Here, older, magnetic stripe is still the dominant technology.

Gwenn Bézard, research director at consulting firm the Aite Group said, being able to process EMV cards would give PayPal an edge over Square, both because those cards are expected to become more prevalent in the U.S. in the future and because it would give PayPal a jump on Square in overseas markets.

PayPal Here can’t process EMV cards via swiping now, although Shrauger said that will change as PayPal introduces the device in other countries. “Obviously, we’ll support chip-and-pin in markets where those are prevalent,” he said, although he declined to comment on when American users could get chip-and-pin compatible devices.

Even without EMV, Shrauger was bullish about Here’s chances against Square because PayPal lets businesses accept so many forms of payment. “We want them to have one payment solution regardless of how they’re selling,” he said.

Sources:,,, MSNBC


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