By Martha C. White
David Marcus, vice president of PayPalMobile,?announced Thursday that PayPal?is rolling out a mobile credit card reader that plugs into a smartphone's headphone jack, confirming rumors that had been circulating in the tech blogosphere.
In the battle for the small business payments market, the PayPal Here device is a direct shot at Square, the startup run by Twitter co-founder Jack Dorsey.?
"I think PayPal's entry into that mobile point-of-sale segment is long overdue," said Gwenn B?zard, research director at consulting firm the Aite Group. "There is a market, there is a demand."?
Square's ease of use and simple cost structure ? merchants are charged 2.75 percent per transaction ? have turned it into a must-have for many small businesses. Aside from mom-and-pop merchants, Square has also attracted the attention of Visa, which has invested in it, and New York City's Taxi and Limousine Commission, which is conducting a pilot program to use Square in taxicabs.?
Paypal's Here is a blue triangle about the same size as the Square device.?Sam Shrauger, vice president of global product and experience called the device "an extension of PayPal into the physical world." ?
The Here is available in a limited release to 1,000 merchants who use iOS devices. Shrauger said the company will roll it out to the public over the next month or so, at which time he said an Android app will also be available. Like Square, PayPal is offering both the device and the mobile app that processes the transactions on a user's smartphone for free. ?
The blue?triangle could spell trouble for Square. "Given the user base PayPal has, it's likely to be formidable competition for Square," B?zard said.?Square did not respond to a request for comment.
In addition to accepting credit and debit cards via swiping, users can also take a photo of the card to process it (check images can be processed the same way). And PayPal is undercutting Square on price, charging 2.7 percent of the cost of a transaction for swiped transactions or payments made from a buyer's PayPal account. As with Square, sellers pay a little more if they manually type in the card information.?
Andy Schmidt, research director at consulting firm CEB TowerGroup, said the difference in cost is minor enough that PayPal will probably need another competitive advantage to woo users away from Square. "One of the game changers PayPal could offer would be to accept mag stripe and EMV in the same device," he said, referring to the so-called "chip-and-pin" cards that are ubiquitous in many other parts of the world. Here, older, magnetic stripe is still the dominant technology.
B?zard also said being able to process EMV cards would give PayPal an edge over Square, both because those cards are expected to become more prevalent in the U.S. in the future and because it would give PayPal a jump on Square in overseas markets. "I'm curious to see if PayPal is really going to come up with something different," he said.
Here can't process EMV cards via swiping now, although Shrauger said that will change as PayPal introduces the device in other countries. "Obviously, we'll support chip-and-pin in markets where those are prevalent," he said, although he declined to comment on when American users could get chip-and-pin compatible devices.?
Even without EMV, Shrauger was bullish about Here's chances against Square because PayPal lets businesses accept so many forms of payment. "We want them to have one payment solution regardless of how they're selling," he said.
This news comes on the heels of PayPal's debut of a digital wallet at the SXSW festival in Austin and a movement into the brick-and-mortar payments arena earlier this year via a partnership with Home Depot. "They're making a pretty effective, multi-pronged attack on the payments market," Schmidt said.?
idris elba kelsey grammer martin henderson mlk day golden globes 2012 winners golden globes 2012 red carpet golden globes red carpet
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.