For small businesses, it can be a real pain to have to deal in cash, and while taking credit cards might be an option, it can be a serious hassle. On top of that, it’s almost impossible to take credit card payments on the go. These are the problems PayPal Here aims to solve. The small card reader and accompanying app allow small business owners — or anyone really — to take credit, debit, and PayPal payments via smartphone, making it much, much easier for them to shut up and take their customers’ money in whatever form the customers can offer it.
The act of actually accepting the payments seems pretty simple. After you plug in the PayPal Here cardreader, your phone will pop up the PayPal Here app which appears to be customizable depending on what your selling. You ring up the customer by selecting the appropriate items and then scan their card. Then, you hand the phone to the customer who can add tip if applicable, sign, and specify where the receipt should be sent. And that’s it, transaction completed. The seller will have their money available in a PayPal account immediately.
Naturally, PayPal Here is going to generate revenue for it’s parent company by issuing fees, so there are some fees involved. On the upside, the reader is free. PayPal will take a 2.7% fee on every card swipe and PayPal payment. Simple as that. Merchants can actually catch a bit of a break, however, by using a PayPal issued debit card which provides 1% cash back on purchases meaning that they can effectively reduce that fee to 1.7%. Now I’m not sure what kind of fees your looking at if you want to accept credit cards in a more traditional fashion, but 2.7% doesn’t seem that bad considering the convenience.
From a security standpoint, the card reader is “fully encrypted” according to PayPal, though they haven’t mentioned any details further than that. Considering that this would be an especially lucrative thing to hack into, I can understand why they might want to play it close to the chest. Just by virtue of being associated with a name that is generally trusted, however PayPal here gains some credibility, even if PayPal has done a few questionable things in the past. For the moment, PayPal here is launching in United States, Canada, Australia and Hong Kong, and for iPhone, but more countries and an Android app are slated to be coming next month.
All things considered, it seems like the PayPal Here could be a great technological advancement for sellers and buyers everywhere. I’m sure everyone who sells things out there would love to be able to accept all forms of sweet, sweet money more easily, and I like the idea of a world where I don’t have to walk around with a bunch of cash. In fact, if I saw one of these in the wild, I might go out of my way to make a purchase just to try it out. In the meantime, I’ll have to start getting rid of all the tens upon tens of dollars I have stashed in my apartment.
(via The PayPal Blog)
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- Largely due to PayPal’s reluctance to process donations to Wikileaks
