- Highs: No monthly fees. No long-term commitment. Immediate fund availability.
- Lows: High transaction fees, especially for non-Australian cards. EFTPOS cards not accepted.
- Buy if: You already use PayPal for online transactions and would like to manage everything in one place.
What is PayPal Here?
PayPal is an online payments giant that has operated for over 20 years in the business of online payments.
Apart from online transfers, ecommerce and other remote payments, PayPal offers a card reader service called PayPal Here. This is aimed at Australian merchants looking for an easy solution for accepting in-person card payments.
The PayPal Here Card Reader accepts debit and credit cards by Visa, Mastercard and American Express and the mobile wallets Apple Pay and Google Pay, but not EFTPOS cards.
How PayPal Here works
With PayPal Here, you use a mobile terminal (also referred to as a “card reader”) to process debit and credit card transactions. The card reader uses Bluetooth to connect to an iPhone, iPad or Android smartphone or tablet device with the PayPal Here app installed (free to download and use).
PayPal Here iOS app with card reader.
Applications are made online, where you first log in to your existing PayPal Business account or create a new account. Through the PayPal account, you can apply for the PayPal Here service and order the card reader.
It is also possible to accept payments through the app itself without the terminal, if the customer has a PayPal account. However, it should be noted that fees for app-based payments are considerably higher than standard card transactions.
Once you have the card reader and accept card payments, you will be charged for transactions on a pay-as-you-go basis.
PayPal Here used to offer different card readers, but have since decided to offer only the most versatile of them which is of the model Miura M010. Overtly, this is called the PayPal Here Card Reader.
The terminal has a PIN pad for chip and PIN cards, swipe slot for magnetic stripe cards and NFC function for contactless cards and digital wallets. In other words, is accepts all card types, limited to the card brands mentioned earlier.
With the rise of contactless payments in Australia, tap and go has become an essential rather than a bonus feature.
The swipe slot is mainly for cards from the US, where magstripe is still used. Australian cards will mainly use the chip and contactless technology.
The PayPal Here card reader.
How much does it cost?
With PayPal Here, you buy the card reader for $90 + GST when you make an application to use the service.
As for transaction fees, this is where things start to get a little bit expensive. Each Visa or Mastercard transaction costs 1.95% which is higher than Square’s rate (1.9%).
Manuel-entry payments in the app are also more expensive than Square, at 2.9% + 30¢ per transaction.
If you accept foreign cards from a different currency, you pay 3% above the base conversion rate. Transferring money from the online PayPal account to your associated bank account costs 1% of the transfer total.
Advantages: quick cash flow and no monthly fee or lock-in
So what are some of the major advantages of PayPal Here? First of all, PayPal is an established and trusted payments operator. As such, you are dealing with a reputed company with a strong reputation for upholding high levels of security in its operations.
You can therefore sleep better knowing that PayPal will be around for the foreseeable future.
Secondly, there are no monthly fees with PayPal Here which means that you only pay for transactions actually processed.
Thirdly, funds from card payments are generally available immediately in your PayPal account, offering a strong cash flow advantage.
From your PayPal account you can send money to your bank account in-app or by using the online dashboard.
Furthermore, if you already use PayPal for online transactions or ecommerce, then you may find PayPal Here to be highly convenient. Using it allows you to keep everything in one place rather than having to deal with multiple providers.
In addition, there is no long-term commitment required, which means that Paypal Here comes with no service cancellation fees. This is a significant advantage, considering certain other competitors charge hefty amounts for leaving their services.
That said, since Square arrived in Australia, PayPal Here is not the only provider of contract-free payment solutions with simple fees, so PayPal is not necessarily the best option.
Fees and lack of EFTPOS support are large downsides
As discussed above, transaction fees are a negative point of the PayPal Here service, compared to the competition. In addition, PayPal Here does not currently support transactions made through the EFTPOS network.
Although Visa and Mastercard uptake has increased among Australian consumers in recent years, EFTPOS is still one of the more common forms of payment.
In our opinion, this is perhaps the largest disadvantage of the PayPal Here solution, as it means that you will be unable to accept a large number of in-person transactions. EFTPOS payments tend to be relatively inexpensive for small businesses so there is also a cost consideration when customers are forced to use their Visa or Mastercard.
Verdict: solid offering, but could be cheaper
We found PayPal Here to be a payment solution that is reliable, convenient and effective for processing card transactions. It could be cheaper in some respects and hopefully EFTPOS payment support will be added in the future, but the contract flexibility and no monthly fees are both very welcome for small businesses.
If you want a mobile payment solution without committing to a long-term contract, then PayPal Here might be worth considering. Compared to most mobile card readers in Australia, PayPal Here is a solid candidate.