“PayPal Here” Announced, and Thoughts on Mobile Payment

"PayPal Here" reader deviceThere’ve been rumors about PayPal putting together some kind of competitor to Square for some time, so it wasn’t a complete surprise when they announced PayPal Here earlier today. As with Square, it’s a small reader device or “dongle” that plugs into the audio jack of your smartphone (and presumably your tablet device) and allows you to accept card payments. It also includes an app that will let you to scan in cards and checks using your phone’s camera (according to The Verge, if you use the camera to scan in a card rather than the dongle, you’ll have to manually enter the card’s CVV code and the zip code associated with the card into the app).

PayPal’s entry into the “accept credit card payments with your smartphone” game is a sign of things to come. It “validates the market”, to use a phrase in the startup vernacular, moving it from a relatively fringe idea to something you’re going to see more often in the coming months. Shopify’s biz dev dynamo Brennan Loh observed at a recent conference for retailers that there seemed to be two schools of thought about what cash registers should be: the old school vendors with their old-style anchored-to-the-checkout-counter cash registers and the new school vendors, who cash registers were either phones or tablets, a la the Apple Store.

Shopify’s Edward Ocampo-Gooding watches as “Cajun” the pedicab driver charges his credit card with his mobile phone.

I’ve made mobile payments indoors a number of times, at a couple of small shops where there just wasn’t room for a traditional cash register. It wasn’t until a couple of days ago when I got the “fully mobile payment experience”. My coworker Edward and I were at the South by Southwest Interactive Festival and took a pedicab — a bicycle-powered cab that can take two passengers — when we realized we were both short cash.

“No problem,” said “Cajun”, our driver. “I got Square.” When we got to our destination, he took his iPhone out of his pocket, stuck the Square dongle into the headphone port and swiped Edward’s card, a transaction that would’ve been impossible only a couple of years ago. And now, there are at least two big providers of such a service.

It’s an interesting new arena, and as a techie in the ecommerce and mobile businesses, one I’ll definitely keeping an eye on.

This article also appears in the Shopify Technology Blog.