PayPal is launching a chip and PIN version of its dongle for turning mobile smartphones into card payment terminals as it seeks to grow its European operations before its US rival Square establishes itself across the Atlantic or more locally-based competitors such as mPowa or iZettle, which launched its own chip and PIN reader recently, become too established.
The PayPal Here technology is already in the US, Canada, Australia and Far East and consists of a downloadable free app and small card reader terminal that transforms a mobile phone into a payments acceptance device, allowing customers to swipe cards and pay anywhere, at any time.
Up until this latest announcement, however, the chip and PIN security measures prevalent in Europe have hindered its uptake, hence the reason for the additional launch. The full launch is not planned until this summer to allow testing with European businesses to progress and identify any ‘snagging list’ issues – one of the small-to-medium sized enterprises (SMEs), which is the target audience, involved is the ‘Greedy Goat’ ice cream firm based out of London’s famous Borough Market foodie haven.
Prices have not been revealed yet, but it can be expected to undercut the established card schemes merchant fee per transaction.
Commenting on the trials, Mark Thomas of the ‘Greedy Goat’ ice cream makers, said: “Cash is king in the market, but people run out of cash very quickly, and we often lose sales because customers can’t face the long weekend wait at the cash machine. PayPal Here is the perfect solution for us, as it gives our customers the chance to pay by card, backed by the reassurance of the PayPal name on the machine.”
According to Eden Zoller, principal analyst at the Ovum consultancy, the UK is the logical place to start as it is PayPal’s second biggest market outside of the US with some 18 million active users.
“PayPal has taken pains over the PayPal Chip and PIN device, which was designed and built in the UK and has been over a year in the making,” he says. “But it will come with a price tag and this will need to be competitive given the solution is meant for small businesses. PayPal says this will be the case – it is not looking to make money from the device itself. Mobile credit card reader solutions appear to address a genuine need in the market, providing an easy and convenient way for small businesses to accept card payments without having to invest in costly credit/debit card processing equipment.
“The market for these solutions is becoming increasingly competitive and PayPal Here is not the first of its kind in Europe, where the likes of iZettle, Payleven and mPowa have already launched. But PayPal has an advantage in being an established, trusted payment provider with a high profile global brand.”