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PayPal launches "Here" smartphone card reader


March 18, 2012

PayPal has introduced its new Here cardreader system for smartphones

PayPal has introduced its new Here cardreader system for smartphones

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The profusion of apps for smartphones certainly seems to know no bounds, and while NFC based payment seems set to become the dominant form of cashless transaction, smartphone peripherals that allow users to swipe credit and debit cards still have a role to play. The most notable of these devices is Jack Dorsey's Square system and now, online payment giant Paypal has flexed its appreciable muscle and entered the fray with its new, triangular "Here" card reader, due initially for a limited release.

Paypal, which made a name for itself by pioneering the secure cashless transfer of money over the Web, wants to expand by bringing its simple, efficient system to real world, face-to-face payments, as well. To help pull it off, they approached San Francisco design house, fuseproject, and the result is a system that will, literally, give Square a run for the money. Like its four-sided competitor, Here will also be free, but each transaction will incur a 2.7% transaction fee. iOS 4.0 iPhone and (eventually) Google Android owners in the U.S., Canada, Australia and Hong Kong will get first crack at it, with other regions to follow thereafter.

When attached to the top of a smartphone's audio jack port, the front of the two-layer arrow-shaped reader swings down to keep the device from pivoting on its circular connector while reading cards. The app that drives it will produce a distinctive audio tone that signals both successful connection of the device to the phone and completion of each transaction - a feature designed to help put both customers and businesses new to mobile payments at ease.

Merchants and restaurants joining the system will sport the blue Here logo and their info will appear in the PayPal mobile app directory. Business owners will have the ability to send electronic invoices with the system which also comes with PayPal's security and fraud protection.

For more on the system's capabilities, check out the PayPal Here faq page.

Source: fuseproject via dezeen

The following PayPal video shows Here in action:

About the Author
Randolph Jonsson A native San Franciscan, Randolph attended the U.S. Naval Academy at Annapolis, Maryland before finding his way to the film business. Eventually, he landed a job at George Lucas' Industrial Light + Magic, where he worked on many top-grossing films in both the camera and computer graphics departments. A proud member of MENSA, he's passionate about technology, optimal health, photography, marine biology, writing, world travel and the occasional, well-crafted gin and tonic! All articles by Randolph Jonsson

2.7% transaction fee? FAIL!

Denis Klanac

And let's see Denis: Square charges 2.75 percent + 15 cents for swiped transactions, and 3.5 percent + 15 cents for keyed-in transactions, as shared from the most recent Gizmag Square-related article. PayPal's offering is lower, even if slightly. If one of them wants to dominate, go 2.3 percent.


@Lumen. What makes you think 2.3% is the winning rate?

Rocky Stefano

This idea is clearly stolen from Square. I hope Square had a patent, sues and wins. (Small innovators deserve to prosper.)

Its sad that the only way to connect to an iPhone is thru the ANALOG headphone jack! Of course, this is an ugly hack. The ultra-closed architecture of the iPhone really is sad. I wouldn't be surprised if Apple replaces analog jacks with something proprietary and digital - says its better...buy your iDigitalBuds at apple.com for only $65.

Can't they support printing via Bluetooth to a local printer at the muffin stand?


Stolen? There's no patents for credit card payment methods. Just need a company to commit the resources and risk of starting up... some will survive, others won't due to costs, customer service or security concerns.

Heaven help if they were American Express... the total fees may add up to over 5% for transactions. Ever wonder why many businesses don't accept American Express? That's why. 2.7% is not terrible...just the cost of doing business and being convenient for your customers (who might not return otherwise!)

Matt Rings

Square has one massive advantage: it's not PayPal. See here for one example: http://conferencesburnedbypaypal.tumblr.com/

iWonder seems to be from some other planet where iPhones don't have a well documented and very capable dock connector. That said, I see no problem using the headphone jack since a card reader is just a very simple analogue tape player, and using another mechanism would have added to the costs of design and production.

It's a bit disappointing that it doesn't seem to have a chip reader since not much of Europe uses (or accepts) swipe readers any more.


From Rocky: @Lumen. What makes you think 2.3% is the winning rate?

Psychology, sir. The two and the three are closer together, lending greater appeal than two and seven, which are further apart. Also 2.3 percent is phonetically easier to say, plus being one syllable shorter than 2.7 percent, both attributes lending greater appeal to word-of-mouth marketing... the best kind.

Additionally, people want to be with a familiar winner that apppeals to the Genesis of their learning. If people conclude in their mind that "They're number one because they're 2.3 percent," the sequential familiarity of the numbers in that thought will increase the desire to be associated with both the company and product, irrespective of whether the person is presently associated or not. The result of this appeal will increase both customer retention and new customers.

Ira Munn

Appeal will start when transction fee is less than .5% up to a maximum of $4 per trans. Pay Pal is plain greedy. Imagine if road tolls were based on the value of the car you drive.


This also strikes me as being a bit old-fashioned. There are far better mobile payment mechanisms appearing now, in particular gocardless.com and Barclays pingit. Both charge much lower rates than paypal (1%), and cut out the paypal 'middle man'. Some limitations at present (you need a smartphone), but they're definitely leading the way.


I have been using PayAnywhere for my business for a while. They have proven to be reliable, as I always receive my funds on time. Their app is very easy to use and had made credit card processing a breeze. I definitely won’t be switching.


Square (in which Visa bought an interest in 2011) has absolutely nothing to worry about, sans its effectively mandated use on the eBay marketplace, the clunky PreyPal could not hit the side of an old timber barn, let alone a modern B&M one.

“Anuj [Nayer], who is PayPal's Global Director of Communications, said payments processed through PayPal Here would be protected the same as any other PayPal payment method - which explains why the Terms of Sale for Here includes a mention of rolling reserves. Yes, merchants who use the new card reader will be subject to the regular PayPal reserves and holds (rare occurrences for sellers in most categories, said Anuj), and PayPal is extending buyer protection to shoppers who transact with PayPal Here merchants.”


Well, many merchants already know what PayPal “protection” is like; many merchants already know what PayPal “rolling reserves” and “holds” are about; and many merchants already know what PayPal “buyer protection” is about—it has a hard wired bias towards the buyer: effectively there is no transaction mediation process as any reasonable person would understand it. And PayPal’s Nayer gives a different meaning to the word “rare” to what the rest of us understand it to mean … And for all this, PreyPal’s fee is only 0.05% cheaper than Square’s? Are they serious?

Am I missing something here or is this initial launch information not enough to cause this product to be literally “dead on arrival”? To me it sounds like another desperate Donahoe foray with Alice down the rabbit hole.

Next time you drop into Home Depot, ask the check-out chick if anyone has yet used (the wholly eBay-funded roll out of) PreyPal to make a point-of-sale purchase. PreyPal at B&M Point-of-Sale is little more than an eBay Dept of Spin-created illusion and is undoubtedly a total waste of eBay shareholders’ funds. PayPal Here will likewise be another eBay lead balloon …

And, just for a laugh, some comments on PayPal "The New Way To Pay In-Store", PayPal Digital Wallet, PayPal Debit MasterCard, PayPal Here, PayPal Local and Watch With EBay ...


eBay / PayPal / Donahoe: Dead Men Walking

Philip Cohen

Donahoe has been too long on the tit of eBay's “tied house” merchants; apparently, he is laboring under the delusion that he can also mandate the uptake of this clunky product. Good luck John, you are going to need it.

eBay / PayPal / Donahoe: Dead Men Walking

Philip Cohen

Square put phone-based credit card acceptance on the map. It was also the first to enable consumers to take cards directly. Ever since it went live in October 2010, Square has been the undisputed champion of the industry and the best its competitors could hope for was to keep up with its pace. However, the launch of PayPal Here has changed all that and Square has found itself for the first time in the unfamiliar position of being the second-best. For a more detailed analysis: http://blog.unibulmerchantservices.com/more-on-paypal-here-vs-square.

Facebook User

@James Stein,

Whaaaaaat is this link, a paid eBay/PayPal commercial?

Visa bought an interest in Square in 2011.

PreyPal does not give you immediate access to your funds: they are deposited into a non-FDIC insured faux PreyPal “bank” account and will be subject to the norman PreyPal rolling reserves and holds; Square deposits the funds into your real bank account the following business day.

PayPal: “live phone-based customer service”. And with PreyPal you will need it.

“Square offers neither”. The fact is, Square simply collects the funds and deposits them into your real bank account; you should not need live phone-based customer support with Square; you most likely will need such support with PreyPal …

The writer considers PreyPal’s fee of 0.05% lower to be a good deal? Give me a break.

Philip Cohen

Hey James, did you notice that there were no comments on that linked article; that's because they have received no positive comments to complement this obviously paid for PayPal commercial; and you can't have negative comments on a paid for blog, now, can you?

Philip Cohen
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