PayPal is taking on Square in the mobile payment space. PayPal’s new mobile payment dongle, PayPal Here, is shaped like a triangle and functions similarly to Square, Intuit’s GoPayment and Veritone’s PAYware. Using the dongle to swipe credit cards directly from a user’s smartphone is an up and coming space with few large players.
“PayPal charges a fee of 2.7 percent of the purchase price for all types of credit and debit cards — including those issued by American Express Co; transaction fees for processing AmEx cards are often higher on other services. That compares with the 2.75 percent charged by Square.”
This venture into offline mobile payments is in line with PayPal’s recent moves. In November, the company “announced PayPal Wallet, a card that lets consumers pay from multiple accounts, store and use gift cards, access special offers and store receipts,” which is expected to roll out this year. PayPal is also moving some of its business in-store. The company has recently partnered with Home Depot to integrate “PayPal software into existing point-of-sale terminals so users can pay either by swiping a PayPal pre-paid card or by entering in their phone number and PIN, which connects to their account.”
PayPal’s mobile dongle will be taking on Square, which specializes in small business-based mobile payment solutions. Square is currently processing $4 billion worth of payments and has 1 million small business customers. The product is also working on new areas of commerce, which includes New York taxis.
Here is an updated link with more details following today’s official product announcement: http://gigaom.com/2012/03/15/how-paypal-here-could-lay-the-hurt-on-square-and-others/