In terms of online payment, Paypal has been king for years now. Aside from paying with a credit card online, your next best option is to set up a Paypal account and use it for all your online purchases. But the realm of business is changing as online commerce is slowly shifting towards mobile commerce, a charge led by the startup Square.
Not to be outdone, Paypal has recently announced its answer to mobile commerce with Paypal Here. Like Square it is a card reader that can plug into your mobile device. However rather than being a white square, the reader is in the shape of a blue triangle. Both serve the same basic function in the fact that they are used to accept credit card payments from a mobile device.
The Paypal Here reader can be acquired for free as well as the app that coincides with it. The app is where Paypal tries to one up Square in its offerings. Though the app is designed for accepting credit card payments it is also able to accept checks, send invoices, and keep track of cash transactions. The app can even accepts cards or checks simply by taking a picture and having the customers authorize the purchase from the mobile device.
So if Paypal is giving that away for free, then how does it plan on making any money? Well it has a similar business model to that of Square. It takes out a flat rate on transactions. With Square that rate is 2.75%. Paypal Here has its rate competitively set at 2.7% making it slightly better for businesses.
However, Paypal also gives businesses a Paypal Debit card that can be used to take cash out of an ATM or it can act as a Mastercard in which you get 1% cash back, which effectively lowers the rate being taken out on your transactions.
The app also lets you browse for merchants in the area that are using Paypal and it also lets you notify them that you are going to be making a purchase. Paypal Here is still very new and though it has already been sent out to a variety of merchants it still needs to focus on increasing the adoption rate as well as preparing for whatever Square may have in store to stay competitive.