Mobile card readers, mobile POS, mobile payments, a wide range of terms used to describe a relatively new payment acceptance method – the ability to accept credit and debit cards via a mobile device (smartphone or tablet) using either a keyed entry or mobile device attachment, often referred to as a ‘dongle’.
This on-the-go payment option has been around for nearly four years, with several early entries, but it reached mass awareness when Square originally launched its electronic payment device in May 2010. Perfect for small business or as an ancillary option for businesses requiring a portable payment acceptance solution, mobile card readers have continued to gain popularity. According to Winter Green Research, total sales of these devices will grow from $1.1 billion (2011) to $3.1 billion by 2018
As with any growing market opportunity there are several key new entries in this space and one notable one is PayPal Here™. Like its competitors, PayPal Here is easy to use, quick to get started and fairly reasonable for a small business in terms of costs and fees. Merchants get started by downloading the free mobile application (available for both Android and iOS), and then after completing their online application, they receive the free attachment device, or dongle, which plugs into their mobile device’s headset jack.
Although limited to the U.S. market, a key differentiator of PayPal Here is that it allows merchants to accept both checks as well as PayPal payments (110 million active user accounts). Funds are deposited in the merchant’s PayPal account and, if withdrawn with PayPal merchant debit card, available immediately. And, PayPal Here is going global, with the recent announcement of expansion to the UK market.
Even with the small business market shrinking in the U.S., mobile payments across the board are expected to grow significantly over the next several years, so expect to see more companies entering (and some exiting) this area of the mobile market.