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PayPal's Mobile Credit Card Reader: What You Need to Know

Elizabeth Peterson

Thinking of using PayPal to accept payments from your clients? Here's what you need to know about it.

  • PayPal Here is the digital payment processor’s credit card reader and app solution that allows businesses to accept many forms of payment through a single platform.
  • PayPal Here is celebrated for its ease of use and ability to accept multiple forms of payment.
  • PayPal Here users can expect to pay fees on transactions and a fee to purchase the card reader in some cases.
  • This article is for business owners looking for a way to accept payments from customers who shop in person.

PayPal is best known for its payment-processing solutions for online merchants and shoppers. But did you know that the company also has a processing solution for in-store and mobile merchants? Here, we’ll detail what PayPal Here offers and what you need to know before signing up for the service.

What is PayPal Here?

Introduced in 2012, PayPal Here is a credit card reader and accompanying app that allows businesses and individuals to accept a wide range of payments – from credit cards to contactless payments – on iOS and Android devices.

Credit card processing can be pricey, but the costs associated with using PayPal Here's credit app and reader are reasonable. It's free to sign up for the service, and there are no contracts or monthly fees – you only pay a fee for each payment you accept. Businesses or individuals simply sign up for a business account with PayPal – or upgrade their existing accounts – and then download the PayPal Here app (also free) on a mobile device.

If you sign up for PayPal Here directly through PayPal, you'll receive a free Chip and Swipe card reader. If you prefer to use the Chip and Tap Reader or the Chip Card Reader, you will have to pay extra to buy those.

Key takeaway: PayPal Here is a credit card reader and business solution connected to your company’s PayPal account.

PayPal vs. PayPal Here: What’s the difference?

PayPal is a consumer-centric product, while PayPal Here is designed as a business solution.

PayPal’s website and app make it easy for friends and family to send money to one another at no cost. Consumers can also use their PayPal account to make payments to businesses, both brick and mortar and online, and to make charitable donations to their chosen organization.

PayPal Here is primarily a business solution for merchants looking for a way to accept all types of payments, including PayPal, for goods and services. PayPal Here allows merchants to process payments from all the major credit cards, debit cards, and PayPal and Venmo accounts. PayPal Here has a separate app for the purpose of accepting and managing these payments; this app also includes tools that allow merchants to send invoices, manage inventory and set prices.

Key takeaway: PayPal is a consumer product which allows users to send and receive money from friends and family, while PayPal Here is a business solution designed for merchants that allows them to accept all types of credit and debit cards.

PayPal Here benefits When you sign up for PayPal Here, you’ll have access to a suite of features that lets you accept many forms of payment while issuing invoices, managing inventory and more. Here are the benefits you can expect when you sign up for PayPal Here:

Smart hardware

If you've ever used a mobile card reader, then you know just how important the design of the devices can be.

PayPal Here gives you three designs to choose from:

  • The Chip and Swipe Reader is free when you set up your account, but additional units cost $24.99. It accepts major credit cards. Swipe the card or insert the EMV chip for fast payment processing.

  • The Chip and Tap Reader costs $59.99 or $79.99 if you want the charging stand to go with it. It accepts cards with magnetic stripes, EMV chips and contactless technology. It also accepts digital wallets such as Apple Pay, Samsung Pay and Google Pay.

  • The Chip Card Reader costs $99.99 and accepts the same forms of payment as the Chip and Tap Reader, but it has a PIN pad and a screen, so it can accept PIN debit cards.

These Bluetooth-enabled devices sync with any smartphone or tablet equipped with Bluetooth 4.0 or above, eliminating the need to attach the devices to a charge port or headphone jack on your smartphone or tablet. All three devices are rechargeable, with an optional charging stand available for more permanent placement at checkout. To get started, all a merchant needs to do is download the PayPal Here app, set up their account and pair their chosen reader to their device.

Merchant-friendly software

The PayPal Here app is easy to use and like most mobile payment apps, uses end-to-end encryption (in addition to an encrypted card reader), to keep your transactions secure.

Merchants can set up the app to calculate sales tax, apply discounts and suggest tips. One unique feature is that it allows you to accept PayPal and Venmo payments using QR codes.

You can manage inventory with PayPal Here using the item catalog. You can upload a photo for each product, add prices and variations like size or color. You can then organize your items into categories or lists.

If you have employees, you can add them to your account as users. Each will have their own username and password, and you can decide which features you want to allow them to access.

When you're running sales reports from PayPal Here, you can choose from weekly, monthly, annual or customized time periods. You can filter your sales by date, salesperson, product or payment type. Reports can be printed, emailed or exported to CSV files.

PayPal Here can be fully integrated with other point-of-sale hardware, like cash drawers and receipt printers, making checkout easier for small retailers.

More ways to get paid

Like most mobile payment processors, PayPal Here lets merchants accept all major credit and debit cards, including Visa, MasterCard, Discover and American Express. In addition to accepting cards, merchants can record and track cash payments through the app, making accounting easier.

Customers using PayPal's mobile app on their smartphones can choose to pay through the app. They simply sign into the app on their phones, check in with a business and confirm their payment to a merchant's PayPal account.

PayPal Here also allows you to send customers invoices directly through the app, making it easy to keep track of accounts receivable.

While PayPal Here's wide range of payment options is a big draw for many merchants, some companies prefer not to use PayPal as their payment processor because of the company's alternative method of depositing merchant funds.

Unlike traditional card processing companies, which deposit the funds from credit card and other payments directly into a merchant's bank account, PayPal deposits merchant funds directly into a merchant's PayPal account. From there, you can transfer the funds to your business bank account. If you want faster access to your money, you can apply for the PayPal Business Debit Mastercard which allows you to use your PayPal funds to make purchases in person or withdraw cash from your account at any ATM. 

Great customer service

One of the benefits of using a well-established payment-processing company like PayPal to accept mobile payments is that you have access to a wide array of support and troubleshooting resources. If you have trouble with PayPal Here, you can reach out to PayPal via email, telephone and even social media.

The company has a Twitter account just for troubleshooting (@AskPayPal), where it answers customer questions in English, French, German, Portuguese, Russian and Spanish. PayPal also has various sites for troubleshooting and answering questions about its products, including a help center and a community forum.

But its solid customer service doesn't seem to make up for what some merchants view as PayPal's overly suspicious approach to fraud detection. PayPal receives a lot of negative feedback from merchants who have had their funds withheld or their accounts frozen or terminated because of suspected fraud or suspicious processing activity. 

Many other credit card processors, including Square, are accused of the same thing. After all, merchants are susceptible to credit card fraud, and payment processors are generally a cautious bunch. Some of the things that can cause the processors to flag your account are abnormally large transactions, sudden spikes in transaction volume and an excessive number of chargebacks.

Because having your funds withheld or your account frozen is more common when using a mobile card processor (the risk of fraud is considered greater), merchants looking for a payment processing solution that's less prone to these glitches may want to consider traditional credit card processing companies that also offer mobile solutions for business.

Key takeaway: PayPal Here gives business owners a convenient way to accept credit cards and contactless payments from their customers. The app is easy to use, card readers are equipped with the newest technology and the company offers robust customer support.

What does PayPal Here cost?

The cost of using PayPal Here’s card processing service is fair, with a card-present discount rate of 2.7% and no additional transaction fees. Keyed-in credit and debit card payments are a bit pricier (due to the greater risk of fraud with card-not-present transactions) and will cost you 3.5% of the total sale, plus a 15-cent transaction fee. 

You can accept your customer’s PayPal or Venmo QR code for a 2.2% transaction fee, discounted through March 31, 2021. The standard 2.7% fee will apply after that date. All PayPal Here transactions conducted internationally are charged an additional 1.5%, no matter which transaction is conducted.

Merchants can also accept other forms of payment with PayPal Here, including direct payments from a customer's PayPal account. This payment option, called PayPal Check-In, also carries a discount rate of 2.7%. For detailed information about the merchant fees associated with PayPal Here, visit the company's merchant page.

In addition to transactional fees, PayPal Here hardware needs to be purchased to use the service. As mentioned above, PayPal Here offers three options. The Chip and Swipe Reader is free for new PayPal Here customers; existing customers can purchase the Chip and Swipe Reader for $24.99. The Chip and Tap Reader costs $59.99 (or $79.99 if you want a charging stand bundled with it) and the Chip Card Reader costs $99.99.

Key takeaway: PayPal Here users will pay fees depending on the transaction type. The PayPal Here Chip and Swipe Reader is free for new customers. Other card readers cost between $24.99 and $99.99, depending on the model.

How to get started with PayPal Here

Opening an account with PayPal Here is a simple process.

  1. Apply for a PayPal business account.

  2. Download the PayPal Here app. This is separate from the regular PayPal app, so double check to make sure you’re downloading the right one. The app is available for both iOS and Android.

  3. Set up your business profile. This involves several pieces of information, including inputting your business name and address and uploading a logo or other recognizable branding to your profile so customers can easily find you.

  4. Customize receipts. You can change the information that appears on receipts, such as your website, customer service information or social media handles.

For full opening instructions, including terms and conditions, visit the PayPal Here website.

Image Credit: rez-art / Getty Images