Subscribe to Entrepreneur for $5

PayPal Here Joins Mobile-Pay Apps Already There

Opinions expressed by Entrepreneur contributors are their own.

PayPal Here, Joins Others Already ThereEBay's payment service PayPal revolutionized how we pay for online purchases. And two years ago, the payment giant attempted to change how we use our phones when it introduced its PayPal Mobile app, which offers to transfer money from one person to another by bumping phones together. And though it would make sense for PayPal to continue its reign in payment innovations, the company appears to be the last to arrive at the mobile-payment party.

Earlier this month, PayPal with a heaping helping of pomp, launched its mobile payment system PayPal Here, which runs on a person's smartphone through a downloadable app and uses a small plastic reader to swipe cards. The company boasted last week that it signed up more than 1,000 new users per hour in its first day.

Though PayPal remains a juggernaut in the online-payment space, the question is, is PayPal too late to make a dent with business customers?

The new platform joins incumbent systems like Jack Dorsey's Square, Intuit’s GoPayment, and North American Bancard's Pay Anywhere, among others. Square, alone, claims more than a million users and merchants and a spokesperson says the company processes more than $4 billion annually. But, it’s a sector that’s growing, says Todd Ablowitz, founder of Double Diamond Group, LLC, a Centennial, Colo., payment systems consultancy. “The entrance of PayPal shows that this is a very real market, with an increasing number of options for target merchants,” he says.

Related: For Some Businesses, Square Register Can Replace Traditional Point-of-Sales Tools

Cynthia Wahl, for one, says she loves Square. The co-founder of Texas Toast Culinary Tours, a Fort Worth, Texas-based tour company, says she routinely uses her Square system to sign up last-minute attendees on their tours—an important financial catch-all for the two-year-old company.

"It's so simple to use," Wahl says. "We signed up in about five minutes and were taking credit cards immediately. The money is in our account the next day. It just seems like Square is looking out for the small business owner."

But features vary from provider to provider. Texas Toast doesn't run tours every month, so Wahl is loathe to pay a monthly fee, which is an option with one of the services. But Ablowtiz says it might make sense for those with a high volume of mobile transactions to opt for a monthly fee and a lower swipe rate. Your business may need to accept multiple forms of payment, generate invoices or process transactions internationally -- features that vary from app to app.

So, how do the main players stack up? Here’s our breakdown to help you evaluate the right mobile system for your business: 

Square - Paypal Here - Pay Anywhere - Intuit GoPayment
Cost of app and reader Free Free Free Free
Swipe fee per transaction 2.75% 2.7% 2.69% 2.7% per transaction or monthly fee of $12.95, plus 1.7% per transaction
Keyed fee

(numbers entered manually) per transaction
3.5%, plus 15 cents 3.5%, plus 15 cents 3.49%, plus19 cents 3.7% per transaction or monthly fee of $12.95, plus 2.7% per transaction
Monthly minimum No No No No
Card brands accepted Visa, MasterCard, Discover, American Express Visa, MasterCard, Discover, American Express Visa, MasterCard, Discover, American Express Visa, MasterCard, Discover, American Express
Other forms of payment accepted Cash PayPal, Check (U.S. only) No No
Funds available Next business day Same day via PayPal or three business days  Two business days Two to three business days
Accepted platforms Android, iOS Android, iOS Android, iOS Android, iOS
Invoicing ability from app Yes Yes No No
International use (available to foreign-based merchants) No Canada, Hong Kong, Australia No No
Syncs with accounting programs No No Quickbooks Quickbooks


Gwen Moran

Written By

GWEN MORAN is a freelance writer and co-author of The Complete Idiot's Guide to Business Plans (Alpha, 2010).