PayPal Enters Crowded European Mobile Payment Field

PayPal is to enter the already crowded field of mobile payment devices for small merchants with the launch in the U.K. of its own chip-and-PIN card reader device and smartphone app, the company announced Friday.

The announcement comes as Sweden’s iZettle, which previously had only a chip and sign reader, announced earlier this week it too had launched its own chip-and-PIN device, and as Payleven, backed by Germany’s Rocket Internet, announced it had gone live also with a chip-and-PIN device which was fully compliant with all major debit and credit cards. Payleven devices went on sale this week.

Earlier we reported on the progress made by the U.K.-based Powa, whose mPowa device has been signed up by Portugal Telecom.

These devices, all variations on a theme, are designed to allow typically SMEs or trades people to accept payments other than cash or invoices. Typically they link a smartphone to a device reader via bluetooth.

Called PayPal Here, the reader looks like a large calculator or one of those devices that banks use for security for online banking. A customer enters his card into the device and taps in his or her PIN. The merchant controls the transaction from the smartphone and has the ability either to email or message a receipt.

Merchants will pay a one-off fee for the device, available from PayPal’s website, and then a per transaction fee. Details were not yet available.

The version that was on show was a pre-launch test version said Cameron McLean, managing director of PayPal UK. It is a relatively simple to use the two devices, although the on-screen instructions were a little confusing the first time you used them.

Merchants have the option of either selecting from a pre-determined inventory, or from typing in on the fly. The device captures basic information about the sales that can then be downloaded allowing merchants to analyze sales by time, location etc.

Although the facility to take a customer’s email or cell number is included to allow a receipt to be sent, that data is not collected, said Rob Skinner, head of PR, for legal reasons. He said the data that PayPal harvested was only for fraud protection use.

The fact that so many companies are rising into this market, first opened up in the U.S. by Jack Dorsey, co-founder of Twitter, with Square, shows the huge potential in the sector. PayPal hopes to leverage its considerable presence online to sign up merchants and, said Mr. Cameron, hoped its brand would provide assurance to merchants and customers alike. PayPal has 18 million accounts in the U.K.

Author: Ben Rooney

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