PayPal targets small business with mobile payments

NEW YORK (AP) ? Small businesses from coffee shops to plumbers will soon be able to accept credit cards through PayPal, using a small triangular card reader attached to a smartphone.

PayPal unveiled a mobile payments service Thursday targeting merchants that don’t already have full-fledged payments systems in place.

Called PayPal Here, the service will let customers pay using credit cards, PayPal accounts or, in the U.S., checks. They won’t need a PayPal account to pay by credit card or check. It rivals existing mobile payment services such as Square.

PayPal and its parent company, eBay Inc., have been trying to push into offline commerce as the line between online and in-store shopping blurs. EBay recently launched a service that lets people use their PayPal accounts to pay for merchandise in Home Depot stores, a program that will likely expand to other large retailers.

EBay CEO John Donahoe said PayPal is giving merchants the tools to give customers more ways to buy things.

“What consumers are looking for is the ability to shop anytime, anywhere,” Donahoe said in a phone interview, adding that merchants need only a smartphone to accept payments through this new service.

The latest offering, aimed at small businesses, is available for the iPhone already with some merchants, and a version for Android devices will be out soon.

PayPal Here doesn’t have an app for Apple’s iPad yet, while Square does. That said, the iPhone version does technically work with the iPad, as do other iPhone apps.

Businesses will be able to accept payments without the card reader, though this will be more time-consuming. Merchants will be able to manually type in credit card information, use a camera phone to scan the card or email customers an invoice that they can pay later.

The service is already available for some merchants PayPal pre-selected in the U.S., Canada, Hong Kong and Australia. It should be available to other businesses in the next couple of weeks.

PayPal will take a 2.7 percent cut for each credit card or PayPal transaction, slightly less than the 2.75 percent commission taken by Square for credit card payments. Accepting checks will be free, while merchants who type in the credit card information manually or scan it will pay 3.5 percent plus a 15 cent fee per transaction.