Our rating(3.5/5)
PayPal Here is a respectable pay-as-you-go solution for face-to-face payments, but transaction fees are not that competitive.
PayPal Here is PayPal’s own card reader and app for in-person payments, with easy sign-up and no contract. The service is best for small businesses, but merchants with low or inconsistent sales volumes may find it a little pricey.
  • Highs: No contractual lock-in or monthly fees. Tools for online payments. Integrated with PayPal business account.
  • Lows: Complex fee structure with least competitive rates for small businesses. Only accepts the most popular card brands.

This is a review of the UK version of PayPal Here. Read about PayPal Here in the United States and Australia.

Note: PayPal now sells iZettle Reader instead of PayPal Here. If you sign up through PayPal, payouts through iZettle will settle in your PayPal account for 1.75% per transaction.

Taxi drivers and others requiring the PayPal Here reader described in this review can get in touch with PayPal support to order it.

Lowdown

PayPal Here, the chip and PIN reader by PayPal, has a lot in common with the other leading mobile card readers in the UK, iZettle Reader and SumUp Air. Before you decide on one, there are three important differences you should be aware of: price, functionality and accepted cards. Let’s see how PayPal compares with the UK competition.

iZettle SumUp
PayPal Here card reader iZettle Reader 2 SumUp Air card reader
Solution type Card reader + mobile app Card reader + mobile app Card reader + mobile app
Card reader price £45 + VAT (offers may apply on website) £19 (normally £59) + VAT (link to offer) £19 + VAT (link to offer)
Size 10.3 cm x 7.1 cm x 1.8 cm 11 cm x 7 cm x 2 cm 8.4 cm x 8.4 cm x 2.3 cm
Chip card fee 2.75%–1.0% depending on sales volume 1.75% 1.69%
Swipe card fee 3.40% + 20p No swipe No swipe
Cards accepted  Visa Visa ElectronMastercard Maestro American Express   Visa Visa Electron V Pay Mastercard Maestro American Express Union PayDiners ClubJCBDiscover   Visa Visa Electron V Pay Mastercard Maestro American ExpressUnion PayDiners ClubDiscover
Contactless ContactlessApple PayGoogle Pay ContactlessApple PayGoogle PaySamsung Pay ContactlessApple PayGoogle Pay
Settlement Instantly to PayPal account, few hours/days to bank account 1-2 working days 1-3 working days
Tipping Yes Yes No
iZettle SumUp
iZettle SumUp
PayPal Here card reader - small iZettle Reader 2 small SumUp Air small
Card reader + mobile app Card reader + mobile app Card reader + mobile app
Price
£45 + VAT (offers may apply on website) £19 (normally £59) + VAT (link to offer) £19 + VAT (link to offer)
Size
10.3 cm x 7.1 cm x 1.8 cm 11 cm x 7 cm x 2 cm 8.4 cm x 8.4 cm x 2.3 cm
Chip & contactless card fee
2.75%–1.0% depending on sales volume 1.75% 1.69%
Swipe card fee
3.40% + 20p No swipe No swipe
Cards accepted
 Visa Visa ElectronMastercard Maestro American Express   Visa Visa Electron V Pay Mastercard Maestro American Express Union PayDiners ClubJCBDiscover   Visa Visa Electron V Pay Mastercard Maestro American ExpressUnion PayDiners ClubDiscover
Contactless
ContactlessApple PayGoogle Pay ContactlessApple PayGoogle PaySamsung Pay ContactlessApple PayGoogle Pay
Deposits
Instantly in PayPal account, few hrs/days to bank account 1-2 working days 1-3 working days
Tipping feature
Yes Yes No
iZettle SumUp

The first version (v.1) of PayPal Here launched in 2013, but was phased out after the current v.2 card reader (which accepts contactless payments) launched in mid-2015. This current version is similar to what used to be called iZettle Contactless Pro before it upgraded to the iZettle Reader. Even though PayPal Here is rather bulky compared with the sleeker iZettle and SumUp card readers, it is actually a few grams lighter.

How does it work?

You’ll need to get the PayPal Here card reader and download the free app on your mobile device, available on Android devices, iPhone and iPad. The chip and PIN reader must be connected to the mobile app via Bluetooth.

PayPal Here UK card reader

The contactless card reader connects via Bluetooth to a phone or tablet running the PayPal Here app.

If you use an Android, make sure it has Bluetooth 2.0 or higher. It does not work with certain Samsung Galaxy models like Galaxy Ace, Galaxy Ace Advance and Galaxy Pocket. Windows phones are not compatible.

PayPal Here is suitable for any business that’s looking for a low-cost card reader (although pricier than iZettle and Square readers) with no monthly costs apart from transaction fees. It is only available for businesses – and only those with an approved PayPal Business account.

It’s ideal for payments on the go in areas like food delivery services, cab drivers, market stalls and festivals.

Standard cards supported

PayPal Here supports Visa, Mastercard, Maestro and American Express. For amounts up to £30, customers can tap their contactless card on the device without entering a PIN. Manual entry and swiping cards are also possible, but these incur higher fees (see below).

In addition to what PayPal offers, SumUp and iZettle both accept V Pay, Diners Club, UnionPay and Discover, while iZettle also accepts JCB. (See why this matters.)

Apple Pay and Google Pay (formerly Android Pay) are accepted by PayPal Here, but Samsung Pay is still not. With Apple Pay, transactions of over £30 can be processed.

Accepted cards

VisaMastercardMaestroAmerican ExpressContactlessApple PayGoogle PayPayPal

PayPal charges and fees

This is a big topic, and it’s where PayPal Here falls short of the competition, firstly because the fees are higher, and secondly because – for a “simple” pay-as-you-go system – the fee structure is incredibly complicated.

VisaMastercard
Chip and contactless
2.75%
– 1.0%
American Express
Chip and contactless
2.75%
VisaMastercardAmerican Express
Manual entry and swipe
3.40%
+ 20p
Foreign cards + variable fees

Getting the card reader is the easy part. It normally costs £45 + VAT but is occasionally on offer. Given that you then own the terminal and have no further monthly rental charges, it is affordable. Shipping is included for UK addresses. The accompanying app is free on iPhone, iPad and Android devices.

It’s with the transaction fees that things start to get difficult. Your rates depend on your monthly sales volume, type of cards used and whether the card payment was made via chip, contactless, swipe or manual entry. Whether the card was issued in the UK or not is another cost factor.

Visa and Mastercard can qualify for a processing rate of lower than 2.75% if your total monthly card turnover is over £1,500. Amex is always processed at the top rate of 2.75%, or higher if swipe or manual entry is used.

The simplified rates-by-card table above shows the blended pricing rates. There are, however, two types of pricing structures to choose from: Blended pricing and an Interchange Plus plan.

The fee structure for Interchange Plus includes two elements: the interchange fee set by Visa and Mastercard and the fee set by PayPal. Blended pricing is more predictable – you pay one rate regardless of type of interchange fee charged by Visa and Mastercard.

Total monthly sales Blended fee Interchange Plus
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+ 1.0% IC + 0.75%

IC = card interchange rate. Varies from 0.2% to 2.0%

Total
sales/
month
Blended
fee
Inter-
change
Plus
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+ 1.0% IC + 0.75%

IC = card interchange rate. Varies from 0.2% to 2.0%

There are some exceptions to the above rates. Manual entry of card details or swiping the magnetic stripe costs 3.4% + 20p (Blended fee) or IC + 3.15% + 20p (Interchange Plus). American Express cards are charged at 2.75% for chip and contactless payments and 3.4% + 20p for manual entry and swipe. Additional cross-border fees for cards issued outside the UK may also be applied.

Interchange Plus is worthwhile for more mature businesses that predominately accept debit cards.

Most debit cards issued in the UK and the European Economic Area (EEA) carry a 0.2% interchange fee. This would make the total transaction charge 2.7% for a monthly sales volume below £1,500 if you only accept UK-issued debit cards.

As soon as you start accepting credit cards, especially corporate cards, the charges become less affordable and for many businesses less acceptable.

…with the Interchange Plus plan, funds take 1-2 business days to reach your PayPal account, whereas the blended-rate plan deposits money to the PayPal account immediately.

Corporate Mastercard typically applies a 1.6%-to-1.9% interchange rate. If you accept cards like these under the Interchange Plus plan, you pay 4.