After dominating the eCommerce payment space, PayPal has set its sights on in-person payments with a mobile card reader called PayPal Here.
In this review, I’ll take do deep dive into PayPal Here, covering the POS app, security, customer support and more. Let’s get started.
What is PayPal Here?
Most people know PayPal as an online payments company but they’ve actually had a chip card reader for in-person payments on the market for the past six years.
The PayPal Here is a small credit card reader that’s roughly the size of a wallet. You pair it with PayPal’s POS app on a mobile device (iPad, iPhone, Android device, etc.) via Bluetooth and then start accepting mobile payments wherever you have an internet connection.
While PayPal is yet to square up to big merchant service companies like Worldpay, the PayPal Here is an intriguing first step into the world of in-person payments and pitches PayPal against some exciting (and well established) startups.
Use the new card reader to securely accept payments with tap, chip or swipe. Simply tap to accept Apple Pay, Android Pay, and contactless cards; or insert chip cards to accept payments securely with the latest in EMV technology. (Shopify)
Like most mobile card readers, PayPal Here doesn’t have a monthly subscription fee and instead charges payment processing fees on a pay-as-you-go basis.
PayPal Here accepts payments from Visa, Mastercard, Maestro and American Express (Amex). For transactions up to £30, customers can use contactless payments (as long as they have a contactless debit card or credit card). It will also accept payments from NFC payment services like Google Pay (formerly Android Pay), Apple Pay and Samsung Pay. Finally, you can manually enter the card number into the app and swipe the magnetic strip, although these payment methods incur additional charges.
It’s also worth highlighting that PayPal acquired the competing credit card and debit card reader iZettle in 2018 for $2.2 billion. Despite the buy-out, PayPal continues to offer both products simultaneously.
What PayPal Here products are available?
All card readers offer products on top of their basic card reader and PayPal is no different. I’ve recapped the main ones below.
- Card Reader Accessories: PayPal sells the usual range of credit/debit card reader stands, receipt printers and an innovative range of protective cases and carriers.
- POS Systems: To stay attractive to larger businesses, PayPal offers an all-in-one POS system called POStoGo. It’s a really impressive system, although it’s substantially more expensive than competing products.
- Bouncepad: The Bouncepad is PayPal’s iPad stand. It basically fixes an iPad to a ball joint, allowing you to flip it over so it’s facing customers. It’s handy for demoing products, reception desks and that sort of thing.
- Black Cab Kit: PayPal has gone all in on black cabs and taxis, designing specialised holders and printers for use in cars. It’s a great idea and super useful for taxi drivers. For the rest of us, I’m not sure how much value it brings.
PayPal offers all the basic stuff like card reader stands and all-in-one POS systems, which is great for mainstream customers. While the specialised products like the black cab kit are impressive, they provide absolutely no value to 99% of customers.
Is the PayPal Here reader easy to use?
PayPal has opted to use a third-party reader from a company called Miura. Specifically, it’s the Miura M010 reader and is coincidentally the device that iZettle used up until June 2016.
Despite being a slightly older device, the card reader is remarkably good and it’s no surprise why iZettle stuck with it for as long as they did. It’s a small device but it feels reassuringly solid in the hand. Yes, the screen is a bit dated but customers are already used to dealing with ten-year-old card terminals in corner shops and garages so it hardly feels out of place.
Some reviews criticise PayPal Here for not using a more modern reader but I genuinely don’t think it’s a problem.
How good is the PayPal Here POS app?
The PayPal Here app is the brains behind the operation and without it you can’t actually process payments. Essentially, the app acts as a basic point of sale (POS) system where you create transactions by adding products to a basket or typing in a custom value. The card reader connects to the POS app via Bluetooth and the app processes payments via mobile internet or Wi-Fi.
The backend system is pretty intuitive and it doesn’t take too long to get your business all set up. If you’re completely new to POS systems, it’ll probably take a bit longer to figure out but PayPal’s support section is reasonably helpful. You can set up products in a product library, adding product variables like VAT rates, images, categories and so on.
As I mentioned briefly above, to create a transaction, you either enter a value manually or select products from your product library. Once you’ve confirmed the transaction, your customer completes the transaction using the card reader.
Because your PayPal account is linked to the PayPal Here app, you’ll see a combined sales report for online and in-person sales in your account details. If you are already using PayPal for your small business, this is tremendously helpful as it avoids the need to combine two sets of sales data.
How much does PayPal Here cost?
When you’re comparing the price of a mobile card reader, there are two key costs to consider. First, you have the price of the card reader. Since you buy the reader outright, you’ll have to pay to replace it when it stops working. Second, you have the payment processing fee which is charged on every transaction you process.
In the next few sections, I’ll run through each cost and will then compare SumUp with its main rivals.
PayPal Here card reader cost
The only thing you need to actually buy to get started is the PayPal Here card reader. The reader costs £45 + VAT when bought directly but can occasionally be picked up for less if it’s on offer.
Be careful if you are buying your reader from a third-party channel. PayPal produces a range of card readers — Chip & Swipe, Chip & Tap, Chip Card and Mobile — for non-UK markets. However, only the card reader I discussed above will work in the UK.
PayPal Here transaction fees
Most other card readers pride themselves on straightforward, simple pricing. Square and iZettle, for example, both charge a fixed 1.75% transaction fee for all payments and SumUp charges a fixed 1.69% transaction fee. (iZettle used to operate a sliding scale but they ditched it pretty quickly.)
PayPal, however, has gone against the grain and introduced a sliding fee scale based on your monthly sales volume. In fact, they actually have two sliding scales as they offer a Blended package and an Interchange Plus package. Here’s a quick look at PayPal’s offer.
|Total Monthly Sales||Blended Fee||Interchange Plus Fee|
|Up to £1,500||2.75%||IC + 2.5%|
|£1,500.01 – £6,000||1.75%||IC + 1.5%|
|£6,000.01 – £15,000||1.5%||IC + 1.25%|
|£15,000.01-£25,000||1.0%||IC + 0.75%|
In practice, that means the more you process, the lower a percentage PayPal charges you.
Look simple? Well, it’s about to get more complicated. PayPal Here always charges American Express cards at 2.75% regardless of your monthly turnover. Manual debit or credit card entry (virtual terminal) and magnetic strip payments attract higher fees of 3.4% + 20p on the Blended package and IC + 3.15% + 20p on the Interchange Plus package. And if you process a card that’s issued outside of the UK, PayPal says additional fees may apply.
This complex pricing makes it difficult to compare PayPal to its competitors but I’ll try anyhow.
PayPal Here compared to other readers
Now you know how much PayPal charges, we can compare its pricing to its competitors. The PayPal Here is really competing against two different types of debit/credit card payment processing device. First, you’ve got other mobile card readers like iZettle, SumUp and Square. Second, you’ve got traditional rented credit card machines.
Let’s start by comparing PayPal Here to its direct competitors in the card reader niche.
|Product||Payment Processing Fee||Device Cost|
|PayPal Here||1.00 to 2.75%||£45|
|Shopify||1.5 to 1.7%||£79|
In terms of card reader cost, PayPal sits at the higher end of the scale. Only iZettle and Shopify are more expensive. The PayPal Here device is definitely well built but it’s up to you whether it’s worth the £45 PayPal is asking.
As you can see, PayPal’s competitors all charge card payment processing fees within 0.06% of each other, which is negligible. By using a sliding fee scale, PayPal has, at least, differentiated itself from the competition. However, especially for low volume merchants, PayPal’s 2.75% is very expensive — over 1% more than the low-cost SumUp reader. As a merchant’s turnover rises, PayPal’s fees will fall, eventually reaching a market-leading low of 1.00%. However, as I’ll discuss next, at high card payment volumes, card readers are really competing against traditional rented terminals.
As I mentioned, the second comparison you need to think about is with the type of card terminal you see in traditional retailers like ASDA and Waitrose. These terminals are rented to merchants by payment processors on long-term rental agreements and come with minimum monthly payments. Because of the long-term agreements and minimum monthly fees, the payment processing costs are usually very low. If you sniff out the best deal, you can usually get your card payment processing costs under 1.00%, which is cheaper than the best rate offered by PayPal Here.
Generally speaking, if you process more than £2,000 per month, you’re cheaper ditching your mobile card reader and going with a traditional rented terminal.
How is PayPal Here’s customer service and support?
PayPal has taken flak for its inefficient customer service for years so I wasn’t expecting much when I tested PayPal Here’s support. Like most card readers, PayPal tries to push customers towards an online knowledge base. PayPal Here support is mixed in with regular PayPal documentation so it can be difficult to find what you’re looking for. Also, there just seems to be fewer support docs available than other card readers.
If PayPal’s online help fails, you’ve got email and phone support to fall back on. Phone support is available from 8 am to 8:30 pm from Monday to Friday and 8 am to 6.30 pm on Saturday and 9 am to 6.30 pm on Sunday. While PayPal’s contactable hours are impressive, we’ve heard a lot of negatives about the quality of support calls. However, I’ve had no first-hand experience so I’ll leave it up to you.
Should I use PayPal Here for my business?
PayPal Here is a complicated proposition. Its complex pricing structure and dubious support make it very difficult to recommend, in general, over competing card readers. However, it does get very impressive reviews across the board.
If you like PayPal and already use the eCommerce payment service for your small business, the PayPal Here makes a lot of sense. However, if you’re picking up your first credit card reader, there are probably better options out there.
For larger businesses, you also need to think about how PayPal Here performs compared to traditional card terminals.
Traditional terminals have relatively large fees and fixed minimum monthly fees, which makes them unattractive for low volume merchants. However, the crossover point is relatively low and it starts to make commercial sense to move away from mobile card readers once your turnover hits £2,000 per month.
While card readers are great for small or mobile merchants, they are almost always more expensive than a traditional card terminal above this threshold. So, whether you should or shouldn’t use SumUp for your small business is half a question of whether you like the product and half whether your card turnover is below the £2,000 threshold.