ONLINE PAYMENTS PROCESSOR Paypal is putting Iphones and Android smartphones to work by turning them into readers that allow small firms to accept payments from a variety of sources, including credit cards.
Launched yesterday, the Paypal Here service is based on a small, blue triangular encrypted card reader that plugs into a retailer's Iphone or Android phone via the headphone socket. By firing up the associated app retailers can use the card reader to swipe credit cards, or they can record payment in the form of cash or cheques.
Even without the card reader the app can be used to accept credit card transactions. Payments can be made by using a mobile phone camera to scan and process cards and checks. Retailers can also invoice directly from the mobile app in situations where they might not have a card reader present.
Invoices can also be sent via email, and can then be paid via registered credit card using Paypal's traditional online service.
The reader that can be used to accept a credit card payments is offered free to the owners of small businesses. Paypal makes money by charging retailers a flat rate of 2.7 per cent for card swipes and Paypal payments. Merchants are also given a business debit card for access to their funds.
US shoppers will be familiar with the established rival offering, Square, which does much the same thing, but with a white plastic square rather than a blue triangle attached to the user's phone.
Paypal's VP of mobile, David Marcus sounded a tad defensive when he unveiled the service. "So, you're asking, how is this different from other small business mobile payment solutions? The key differentiator is that it comes from Paypal," he pointed out.
Paypal Here is available for "select merchants" in the United States, Canada, Australia and Hong Kong. It will open to all other merchants in those countries next month, but there is no news of when it might arrive in the UK. µ