PayPal vs iZettle – which offers the best card reader service?

By Lucy Harris|2018-05-25T18:43:00+00:00April 24th, 2018|Tags: , |

PayPal Here has certainly improved since it was launched in the UK five years ago, but the question is: how does it compare with iZettle Reader? Both of these mobile debit and credit card readers offer easy sign-up, no fixed monthly fees, no lock-in and free apps that function as touchscreen point-of-sales.

The card readers work in the same way: you need an Android device, iPhone or iPad to download the free app to the device. The card terminal connects to the app via Bluetooth. As long as you have an internet connection on the phone (3G, 4G or WiFi), you can process payments.


Full PayPal Here review

Full iZettle Reader review
To Website
Get Discount
Device cost
£45 excl. VAT (offers may apply)
Device cost
£59 (£19 excl. VAT through this link)
Transaction fee – chip, contactless
2.75% (reduces with sales > £1,500/month)
Transaction fee – chip, contactless
1.75%
 Transaction fee – swipe, Amex
3.4% + 20p
Transaction fee – swipe, Amex
1.75%
Works with
Most iPhones, iPads and Android devices
Works with
Most iPhones, iPads and Android devices
Foreign cards
Cross-border fees
Foreign cards
No additional fees
Deposits to bank account
Instant in PayPal account, transfer to bank account depends on reserves
Deposits to bank account
1-2 business days
Customer service
Email, in-app, online support centre
Phone: 8am-8.30pm weekdays, 8am-6.30pm Saturdays, 9am-6.30pm Sundays
Customer service
Email, online support centre
Phone: 9am-5am weekdays
Evening and weekend support in £29 premium package

Card reader quality

The PayPal Here contactless card reader M010 by Miura Systems is the same model iZettle sold until July 2016 when it launched iZettle Reader. iZettle Reader processes payments 25% faster than the M010, and the look and feel are certainly a step up. Having tested both extensively, we prefer the payment experience with iZettle Reader. Apart from being faster, it also looks and feels great.

Both card readers can handle contactless tap payments as well as chip and swipe. Each comes with a USB cable to charge the battery, and both last for around eight hours before needing a recharge. If you sell from a desk, the charging dock is a useful accessory. It’s an optional extra for both devices, but well worth the investment.

iZettle Reader on Dock charger
PayPal Here app

Both card readers are good quality. iZettle Reader processes 25% faster and has a more appealing look and feel.

iZettle charges are more competitive

If your business is processing up to £1,500 per month with PayPal, your chip and PIN and contactless rate will be 2.75% per transaction. To qualify for a rate of 1.75%, you need to process £1,500.01+ per month. With iZettle, on the other hand, you pay 1.75% from the first pound you process.

If you take Amex or foreign cards using magstripe, the difference is even more glaring. For Amex and swipe transactions, PayPal charges 3.40% + 20p, and they add a cross-border fee for foreign cards.

To learn more about PayPal’s foreign card fees and their Interchange Plus fee option, read our full review of PayPal Here. We also have a direct comparison between iZettle’s and PayPal’s fees.

PayPal can be convenient for businesses that use the company’s services for their online sales channel. However, attractive fees are not their biggest selling point.

The two readers are both highly affordable. PayPal Here costs £45 + VAT, while the iZettle Reader, normally costing £59 + VAT, is available through this link for £19.

Getting started is easy with both

It’s easy to get started with either option. Simply sign up online for your iZettle account and order the card reader, or order the PayPal Here card reader straight away. In the case of PayPal: if you already have an account, you can order the card reader directly from your dashboard.

To set up, download the app on your Android smartphone or tablet, iPhone, or iPad. Then pair the card reader with the mobile device through Bluetooth.

You should be ready to take card payments within 15 minutes of setting up the card reader. You will find instructions and advice in the little printed manuals that come with the devices, and both companies offer comprehensive online support and documentation.

Read our full review: iZettle: Simple, yet feature-rich, card payment solution for small businesses

Customer reviews

App reviews on Google Play and App Store consistently award the apps highly. To sum up, PayPal Here currently averages 3.7 stars out of 5 in the App Store and 4.3 stars out of 5 in Google Play. Trustpilot UK consistently gives low ratings for PayPal, but because there are several PayPal profiles there, it’s a little hard to determine which is the most reliable average.

iZettle is rated 4.7 stars out of 5 in App Store and 4.2 stars out of 5 in Google Play. On Trustpilot UK, where customers are notoriously ruthless with their reviews, iZettle scores 8.8 out of 10 stars.

Based on these ratings, iZettle appears to have the best customer experience out of all card readers in the UK.

PayPal can be convenient for businesses that use the company’s services for their online sales channel. Attractive fees are not their biggest selling point.

Both iZettle and PayPal are usually very quick when it comes to fixing bugs, proving they take user experience seriously.

Free POS software

What is rather amazing about both PayPal and iZettle is that you get a free point-of-sale app that can make life easier for a lot of small businesses. Both apps allow you to preprogram products with attributes and categorise them for easy checkout. And you can add images to make checking out a lot faster.

But iZettle really excels with their point-of-sale features including in-app barcode scanning. For £39/month per iPad, you can also subscribe to iZettle Pro, a comprehensive point-of-sale system for cafés, bars, restaurants and other catering establishments. The iZettle Go Plus subscription offers extended features for £29 a month, including an integrated e-commerce platform. Both these plans offer many more features than PayPal.

PayPal ecosystem with online and phone payments

One of PayPal’s big advantages is that you have the same provider for online, email invoice, phone and face-to-face payments. But iZettle is catching up – they recently added iZettle E-commerce to their Go Plus package, and they have offered email invoicing for a while. What iZettle doesn’t do is customer-not-present payments by the merchant. The only remote payment options for iZettle are where the customers themselves key in card details, so phone payments and mail orders are not possible, nor is manual entry in the app.

Both companies offer a helpful, easy-to-use backend with sales reports you can use to analyse your business or export for bookkeeping. iZettle integrates with Debitoor and Xero accounting software and PayPal with QuickBooks.

Small business loans available from both PayPal and iZettle

A cash advance against future sales is a tempting offer for many businesses – especially when you can apply online and get an instant response. The service is open to existing PayPal and iZettle customers only. You pay back the loan from future sales using a repayment plan that you choose to suit your business. And when things are slow, you pay less.

To qualify for PayPal’s Working Capital funding, your business must process at least £9,000 per year and have been a PayPal customer for at least 3 months. Eligibility for a PayPal loan is based solely on your sales – so no credit check required.

iZettle Cash Advance works in a similar way. Unlike PayPal, the company doesn’t specify how long you have to be a customer, but it does check your sales to determine whether or not you qualify and how much you can borrow.

Verdict

PayPal and iZettle have revolutionised the payments industry. Their mobile card readers are a viable alternative to traditional card machines, and the competition between them and their rivals has led to sharpened services and (in the case of iZettle at least) lower fees.

When bottom lines are your bottom line and lower costs are key, iZettle wins the battle hands-down. Some businesses may stay with PayPal for convenience, but for those who give iZettle’s card reader a try: take it as read – there’ll be no turning back.

To PayPal site
To iZettle offer