Which is better? It depends
As we have seen, the fee rates of PayPal Here and iZettle Reader are ultimately not that different. For merchants with a fairly predictable sales volume, one might come out better than the other.
For monthly sales below £6,000, iZettle is the safest choice since their fee applies to all cards, while with PayPal, there is always a risk you’ll pay more for some cards. With PayPal, you also have to be on the standard 2.75% fee for at least the first month before you can qualify for the lower fees.
One could possibly say that PayPal offers more potential savings, but with risk involved: you may get stuck just before reaching the next sales threshold, and as such, the fixed iZettle fee could be seen as a “safer” bet.
With both services offering competitive transaction fees, the final decision likely depends on other factors. For example, if accepting American Express is important to you, go with iZettle for the consistently-lowest Amex fee. Furthermore, only iZettle offers UnionPay, JCB, Discover and Diners Club in addition to Visa and Mastercard.
Another thing to consider is how and when you receive your money. PayPal first deposits payments to your PayPal account immediately after the card transaction, after which you need to withdraw it manually to your bank account. These bank account deposits are usually quick and can be done the same day. iZettle automatically deposits directly to your bank account within 1-2 business days of the card transaction.