The "Paypal Here" service includes a free app and fully encrypted thumb-sized card reader, which turns any iPhone, and later Android smartphone, into a mobile payment solution. It consists of a blue triangular reader which plugs into the smartphone's audio jack with an app to control it and has been launched'over there' in San Francisco (right), with the aim of making traditional "payment experiences disappear."
Announced by eBay's online payments unit, it marks an aggressive move into the mobile payments arena and into competition with Square and Google Wallet .
Square is now believed to handles some £2.5bn of transactions year with its cube-shaped card reader which works on smart-phones and tablets. It is currently the only operational in the US but is "beginning to look into other markets."
Google Wallet keeps consumers' credit card information stored in the cloud. Smartphones equipped with the credit card data can be swiped at participating shops. But to date it only works in the US with Samsung's Nexus S 4G smartphone and is restricted to the Sprint network and 140,000 locations.
Paypal charges 2.7% rate for a credit card swipe. That fee rises if card details are entered manually. The rate is just under the Square's 2.75% charge.