PayPal Here lands in UK with chip and PIN card reader

PayPal Here lands in UK with chip and PIN card reader

Summary: PayPal is launching a mobile payment device in the UK this summer as an alternative payment method for small businesses.

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PayPal is bringing its Square-like chip and PIN mobile payment service to the UK this summer, aimed at giving small businesses an alternative payment method to taking cash and cheques.

The system, known as PayPal Here, comes in two parts — a card-reader, which works alongside an iOS or Android smartphone running the PayPal Here mobile app — and enables traders credit and debit card payments without the need to use a separate chip and PIN machine from a bank.

PayPal said that the device will cost under £100, while the eBay-owned company will also take a fee of under three percent of each transaction made using the service. 

After launching Here in the US last year, PayPal is now trialling the system with a handful of businesses in the UK before a full launch in the summer.

Eden Zoller, an analyst with research firm Ovum, said the move was a logical one for PayPal as the UK is PayPal's second biggest market outside of the US, with some 18 million active users. However, Zoller predicts that PayPal will face stiff competition from existing players and the potential arrival of Square in the UK. 

"The market for these solutions is becoming increasingly competitive and PayPal Here is not the first of its kind in Europe, where the likes of iZettle, Payleven and mPowa have already launched," Zoller said in a statement.

"But PayPal has an advantage in being an established, trusted payment provider with a high profile global brand."

Stockholm-based iZettle, which offers a similar service to PayPal Here, launched in the UK last Novemberand charges merchants £49 for its chip-and-pin card readers in addition to 2.75 per of each transaction thereafter — the same fee that US-based Square, recently valued at $3.25bn, charges its users.

Services like PayPal Here, iZettle et al are all hoping to corner the market in payments traditionally taken by small businesses in the form of cheque or cash. According to PayPal, 89 percent of UK adults carried at least one payment card and 66 percent of payments received by small businesses were still in the form of cheques or cash.

"Cash and cheques have served us well over the years but businesses that rely on them risk missing valuable sales," said Cameron McLean, managing director of PayPal UK, in a statement.

Topics: Emerging Tech, Banking, Mobility, Start-Ups, United Kingdom

Sam Shead

About Sam Shead

Sam is generally at his happiest with a new piece of technology in his hands or nailing down an exclusive story. In the past he's written for The Engineer and the Daily Mail. These days, Sam is particularly interested in emerging technology, datacentres, cloud, storage and web start-ups.

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5 comments
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  • PreyPal: back to the future ...

    A PreyPal “Chip & PIN” card reader for Europe? Well, that is “back to the future”; then, John “Not For Commerce” Donahoe has said that “NFC” stands for “not for commerce” …

    And the ugly reality for consumers, particularly smaller payees, dealing with the clunky, unscrupulous PayPal ... http://bit.ly/UVXx53
    Philip Cohen
    • Preypal??

      Any suggested alternatives? I coludint find any dirt on iZettle. Are they any better? Apart from the obvious fees and device costs
      king Edd
  • Paypal - I shuddered reading this.

    The thought of Paypal getting a greater foothold in the UK market worries me no end. I have been on the receiving end of their terrible customer service - don't misunderstand me, their service is great until something goes wrong and that is when the trouble starts.
    They are apparently unaccountable to the FSA in the UK, and appear to have contempt for the consumer. I am not the only person that thinks this, a quick google will reveal hundreds of gripe sites dedicated to Paypal, each with hundreds of horror story cases.

    On a completely separate point, this company operate completely unethically by off-shoring their profits to Luxembourg, so I would seriously recommend that consumers vote with their feet and place business elsewhere as often as an alternative is available, preferably one that pays their taxes fairly in the UK.
    markish99
  • PayPal & ebay

    What I'd like to know is, how do ebay get away with their demand that PayPal be an accepted payment method and that you are not allowed to pass the PayPal fee on or discount other methods against PayPal. I would have thought this being "anti trust" in EU & US
    Kevin Morley
  • PayPal & ebay

    Any suggested alternatives? I couldn't find any dirt on iZettle. Are they any better? Apart from the obvious fees and device costs
    king Edd