We’re at the PayPal event in San Francisco today where the ePayments giant has officially pulled back the curtain on its payment solution for small businesses. The news has been trickling out over the last few weeks now, as Leena reported last week on the fact that the company was prepping for the launch of an in-store payments system focused on smaller merchants. And that they have, with PayPal Here. While it remained unclear what exactly the technology was going to look like, today it’s become fully apparent that PayPal (even if not explicitly) is taking dead aim at Square.
And for good reason, Jack Dorsey’s mobile payment solution has been blowing up of late, but PayPal thinks it is going to have a leg-up on the competition due to its history and experience in the payment space. After 14 years and having attracted over 100 million customers, operating in more than 190 countries, PayPal has a sizable network. It also helps that PayPal’s new global payments solution is nearly universal in the type of payments it accepts.
But PayPal’s new in-store dongle is literally the triangle to Square’s, well, Square. Just like the rest, the triangular add-on just plugs into the headphone jack on your smartphone. Merchants can then accept payments by swiping cards with the thumb-sized card reader, or — and this is a highlight — simply use the smartphone’s camera to scan credit cards (powered by Card.io), scan checks, etc. This saves merchants from having to type in credit card numbers at the point of sale. They can just invoice directly from the mobile app, or, naturally, accept PayPal. It even has “a little wing” that pulls down right over the top to stabilize the card reader as merchants swipe.
Merchants who apply will be given a business debit card, too, to access their funds, with 1 percent cash back on all eligible purchases. PayPal Here offers a flat rate of 2.7 percent for card swipes, and although media has focused on that high percentage, PayPal is quick to point out that, with the 1 percent cash back, total fees are decreased to 1.7 percent.
The last part of this is that PayPal has today released an update to its iPhone app, its popular consumer app with the “Local” feature that allows consumers to use geo-location to find the merchants that accept PayPal in their local area. With this new update, consumers can open the app, tell the merchant they’re in store and ready to pay, and the merchant can then just find their picture, name and information, which is already in PayPal’s system, and voila, no wallet or card needed. Yes, it works just like Square’s Card Case, which was introduced last year.
This has the potential to be a really powerful complement to PayPal Here, essentially allowing PayPal to bypass NFC or QR codes or any other form of mobile payment tech, simply with the geolocation features of customer smartphones and their massive network. This especially true considering that PayPal Vice President of Mobile Dave Marcus said today that it’s going to be pushing it’s consumer iPhone app “really hard” to its existing customers. If they can up the adoption of this app, it’s going to make payments even easier for small merchants.
Today, PayPal is going to be shipping PayPal Here to a few thousand merchants, with full-scale roll-out coming in the next few months. PayPal believes this can be a “game changer,” words that were repeated today during its presentation. With quick-pay, 24/7 support, PCI compliance — a lot of this stuff has been in PayPal’s wheelhouse for years now. It was only a matter of time before PayPal got into the small business game, and now they’re trying to do so with a bang.