Twitter co-founder and executive chairman Jack Dorsey’s other start-up, Square, has been making serious noise south of the border for its ability to turn your phone or iPad into a cash register. Word is the company is now processing about $11 million in transactions every day, up from $1 million just last year. The problem for Canadian merchants and consumers is that Square is only available south of the border. Enter PayPal.
While PayPal’s unveiling of its PayPal Here card reader and app will surely make waves in the U.S. and stoke competitive fires in the mobile payment market, the new offering is a step ahead of Dorsey’s darling by simultaneously launching in several international markets, including Hong Kong, Australia and Canada.
“We could have come out with just a basic card reader a long time ago but we wanted to do something a lot more compelling,” said Darrell MacMullin, managing director of PayPal Canada. “Our users need a real commerce solution provider, not just a card reader.”
PayPal Here is essentially a free thumb-sized card reader and app from PayPal that turns iPhones into a secure mobile payment system, allowing any business or individual to accept Visa, MasterCard and American Express cards, as well as PayPal payments on smartphones, anywhere, anytime. Now you can take more than a few beers for helping your friend move, you can take Visa.
The new version of the consumer app also allows you to check in with a participating merchant close by, making mobile-to-mobile PayPal payments possible in person.
Aside from the consumer convenience, the attraction among merchants is the flat 2.7% transaction fee (compared to Square’s 2.75% in the U.S.), with no annual, monthly or any other sort of fees. It’s the kind of simplicity Square’s been lauded for in the U.S. and that small businesses like Toronto’s Caplansky’s Deli, featured in the video above, can take advantage of.
MacMullin said the program will start with 4,000 existing PayPal merchants across Canada and roll out widely later in the year.
The move is a blow to Square, which probably would’ve enjoyed some brand and hype buzz beyond its borders before such a strong competitor emerged. When contacted about a move north, a Square representative said that while the company is looking into other markets, “There is no specific timeline for our international rollout.”