PayPal Offering Free Card Readers For Phones

If you sell physical goods somewhere like a market, it's hard to accept credit card payments unless you get specialist hardware from your bank. PayPal is now offering a card reader to attach to an iPhone or Android device, which works in conjunction with the PayPal Here app to process payments on the spot.

Right now, PayPal is only letting a selected group of merchants use the iPhone app. General availability is slated for "the near future", which is not helpful. However, PayPal has said that any business which registers its interest on its site in the first six months (that is, between now and mid-September) will get the swipe reader for free.

The catch? You'll have to pay PayPal fees, which are $0.30 plus 2.4 per cent of the transaction value (which rises to 2.9 per cent if you have to enter the card details manually). You might be able to score cheaper merchant rates from your bank.

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Comments

    So how long before my local neighbourhood street hookers and drug dealers have this?

    I love the idea. Only catch is, winning consumer confidence. If I were to show up at my local market with this and asked people to swipe their card into my phone, they'd run a mile and tell everyone I was trying to skim them.

    And Boomzzilla is right. How long before hookers and druggos get one of these? That way I can avoid wallets full of cash!

      Yeah, I thought the same thing myself. I know that normal EFTPOS terminals aren't free from fraud and theft - but there's a definite "perceived" risk in doing the transaction on someone’s phone; it just feels dodgier.

        Not to mention some guy stealing your phone when you hand it to them if you need to manually enter details.

        But perhaps using it on a tablet would be much easier and make people more confident. The more "permanent" a device looks, the more people might trust it. Try bolting a computer down to a table and get people to punch in their credit card details. I'm sure more people would trust it!

          Paypal have said you can take photos of the card in place of manually entering in details, so really, the phone shouldnt leave your hand.

        This is why we have cards with chips in them. This is why we should stop using cards with magnetic strips on them.

    I certainly wouldn't be using this! As a customer this just screams of danger. Card skimming opportunity much?

    As a merchant I would not be dealing with PayPal unless I could absolutely not avoid it (eg, online payments where credit cards are not an option). Their customer service is disgusting at best, a perfect example of why we need government regulation in this industry, companies like this simply cannot be trusted.

    A lot of cab companies (especially in the smaller areas) of the US have these.

    It's actually pretty difficult to get skimmers inside these small, mostly transparent readers anyway.

      What about an application that sits between the Hardware abstraction layer and the application layer that can intercept the information coming out of the card reader? In theory it should be encrypted but there was a debacle a couple of years back where it was unencrypted from a particular brand of card reader.

    Banks have been offering a battery operated GPRS connected eftpos machine for years now.
    What I would like to know is where is the receipt printed from?

    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.”

    http://blog.ecommercebytes.com/cgi-bin/blog/blog.pl?/comments/2012/3/1331862035.html/1/0#1331873673

    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 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.

    And, just for a laugh, a comment on “The New Way To Pay In-Store” via eBay's clunky faux "bank" PreyPal, and some other matters.

    http://forums.auctionbytes.com/vbulletin/showthread.php?t=24611

    eBay / PayPal / Donahoe: Dead Men Walking

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