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

By Lucy Harris| 2017-09-23T15:15:55+00:00 September 18th, 2017|Tags: , |

PayPal Here has certainly improved since it was launched in the UK four years ago, but the question is, how does it compare with the 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 are also touch screen tills.

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
£35 incl. VAT
Device cost
£59 (£25 excl. VAT through this link)
Transaction rate chip, contactless
2.75% (reduces with sales > £6,000/month)
Transaction rate chip, contactless
1.75%
 Transaction rate swipe + Amex
3.40% + 20p
Transaction rate swipe + Amex
1.75%
Works with
Most iPhones, iPads and Android phones
Works with
Most iPhones, iPads and Android phones
Foreign cards
Cross border fees
Foreign cards
No additional fees
Deposit to bank account
Instant in PayPal account, transfer to bank depends on reserves
Deposit to bank account
1-3 business days
Customer service
Email, online support center
Phone 8 am to 9 pm daily (from 9 am Sunday)
Customer service
Email, online support center
Phone 9 am to 5 am weekdays
Evening and weekend support in £20 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. The iZettle Reader processes payments 25% faster than the M010, and the look and feel is 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 with both devices, but well worth the investment.

Both card readers are good quality, the 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 £6,000 per month with PayPal, your chip and PIN rate will be 2.75% per transaction. To qualify for a rate of 2%, you need to process £15,000 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 or need to use the magstripe swipe as a backup, the difference is even more glaring. For Amex and swipe transactions PayPal charge 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.

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 about the same price. For new customers, they’re on offer at close to cost or even less: PayPal Here sells for £29 + VAT, while the iZettle Reader, which normally costs £59, is available through this link for £25.

Getting started is easy with both

Simply sign up online for your iZettle or PayPal account. 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 to your Android device, iPhone or iPad, and 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

Stability issues with latest version of PayPal app

Since PayPal updated their app 31 August 2017, Android users have reported frequent crashes. That said, both iZettle and PayPal are usually very quick when it comes to fixing bugs.

App reviews on Google Play and App Store consistently award them 4 out of 5 stars, and more than 20,000 users have already downloaded both of them.

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.

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 pre-program products with attributes and categorize them for easy check out. And you can add images to make checking out a lot faster.

Each company has its own special feature. PayPal offers a tipping option, more than welcome in the catering and hospitality industry. To use tipping with iZettle, you’ll need to upgrade to Intelligentpos for iZettle, a full point-of-sale software for cafes, bars, restaurants and other catering establishments. Intelligentpos offers many more features than PayPal and starts from £39 a month.

PayPal ecosystem with online and phone payments

One of PayPal’s big advantages is that you have the same provider for online, email, phone and face-to-face payments. On the plus side for iZettle is the ability to e-mail invoices to your customers.

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 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 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 slack, 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 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 out your sales to determine whether or not you qualify and how much you can borrow.

Verdict

PayPal and iZettle have revolutionized 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 reader a try, take it as read, there’ll be no turning back.

To PayPal site
To iZettle offer