Watch out Visa/MasterCard/Amex! Moving more towards mobile and customer convenience, PayPal has released a new thumb-size card reader, combined with their application, turns any iPhone into a mobile payments solution that allows small businesses to accept their virtually any forms of payment (Android app coming soon).
The new service, called PayPal Here, allows businesses to accept payments by swiping debit or credit cards in the card reader. They also have the ability to scan cards and checks using the phone camera or can manually enter credit card information into the app. Merchants have the ability to send an invoice and set payments directly from the app or accept traditional PayPal payments. The card reader is a small blue triangle that plugs into the top of the phone.
All card swipes and PayPal transactions have the same flat 2.7 percent rate with no monthly account or setup fees. Taking checks and issuing invoices are free of charge. In addition, every PayPal merchant will receive a business debit card for same-day access to cash in their PayPal account and 1 percent cash-back on eligible purchases. If merchants use the debit card for purchases, their fees effectively come down to 1.7 percent. The reader and app are free. I personally feel that if this caught on it would eliminate many merchant account headaches small businesses have!