Your favorite food truck owner, small business owner, and enterprising girl scout now have a new option when it comes to taking your credit card payment: PayPal Here.
Announced Thursday at an event in San Francisco, PayPal Here is set to go head-to-head against mobile payment pioneer Square for part of the small business pie.
Much like Square, PayPal Here will have a card reader that plugs into your mobile phone via the headset jack on your handset. While Square’s reader comes in the form of a white square device, PayPal’s will instead be a blue triangle. The encrypted reader will be available for free to small business owners and can be used to accept credit card payments.
While the PayPal Here app is designed to be used hand in hand with the card reader, the app can also be used to accept checks, keep track of cash transactions, and accept credit card transactions in situations where you might not have your card reader present.
Credit card and check transactions can be accepted by capturing a photo of the check or card in question, and customers select a tip amount and sign for the transaction directly on the phone’s screen.
Started by Twitter founder Jack Dorsey in 2010, Square has set the standard for how small businesses accept payments using their mobile phones. The service recently announced it processes an astounding $4 billion in payments each year, and launched a new app that allows iPads to be used as cash registers.
Square is now used by NYC cabbies to collect fares, and by some campaign workers on the road trying to collect donations to support a presidential candidate.
PayPal Here charges users 2.7% compared to the 2.75% per transaction charged by Square. Each merchant that signs up for the service will also be given a PayPal Debit card which can be used to take cash out of your local ATM as soon as a sale is made, or can be used as a Mastercard to make purchases — purchases using the card will earn a merchant 1% back instantly, essentially taking that transaction fee down to 1.7%.
In addition to PayPal Here, PayPal also showed off an updated version of its mobile app today adding a Local section where you can browse for merchants in your area that currently use PayPal.
Much like Square’s register app, you can then notify a merchant you’re on your way to make a purchase. Your name and profile photo will show up for the merchant at its point of sale, allowing you to complete the transaction by simply asking for your purchase to be billed to your PayPal account.