PayPal Here has certainly improved over the years, but how does it compare with the fresher-looking iZettle Reader 2? Both of the 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.

They work the same way: download a free POS app on an Android device, iPhone or iPad, and the card machine 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

iZettle Reader 2
Full iZettle Reader review
To website
See offer
Card reader price£45 + VAT (offers may apply)£59 + VAT (£19 through link)
Transaction fee – chip, contactless2.75% (reduces with sales > £1,500/month)1.75%
Transaction fee – swipe, Amex3.4% + 20p (2.75% for chip/contactless Amex)1.75% for Amex (doesn’t accept swipe)
Foreign cardsCross-border fees applyNo added fees
Works withMost iPhones, iPads & Android devicesMost iPhones, iPads & Android devices
Payouts to bank accountInstant in PayPal account, then manual transfer to bank account (speed depends on reserves)1-2 business days’ settlement (automatic)
Accepted cards
Contactless
Customer serviceEmail, in-app, online support centre. Phone: 8am-8.30pm weekdays, 8am-6.30pm Saturdays, 9am-6.30pm SundaysEmail, online support centre. Phone: 9am-5am weekdays. Evening and weekend support on £29 Go Plus plan


PayPal Here
review

iZettle Reader 2
iZettle Reader
review
Website
See offer
Device cost
£45 + VAT (offers may apply)£39 + VAT (£19 through link)
Transaction fee – chip, contactless
2.75% (reduces with sales > £1,500/month)1.75%
Transaction fee – swipe, Amex
3.4% + 20p (2.75% for chip/contactless Amex)1.75% for Amex (doesn’t accept swipe)
Works with
Most iPhones, iPads & Android devicesMost iPhones, iPads & Android devices
Foreign cards
Cross-border fees applyNo added fees
Payouts to bank account
Instant in PayPal account, manual transfer to bank account1-2 business days’ settlement
Customer service
Email, in-app, online support centre. Phone: 8am-8.30pm weekdays, 8am-6.30pm Saturdays, 9am-6.30pm SundaysEmail, online support centre. Phone: 9am-5am weekdays. Evening and weekend support on £29 Go Plus plan

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 has since updated their card reader to iZettle Reader 2, which – as before – processes payments 25% faster than the M010. Having tested both extensively, we prefer the payment experience with iZettle. Apart from being faster, it looks and feels top-notch.

Both can handle contactless tap and chip payments, but only PayPal Here accepts swipe. Each comes with a USB cable for battery charging, and both last around eight hours before needing a recharge. If you sell from a desk, a charging dock is an optional extra for both devices, but well worth the investment.

iZettle Reader 2 on iZettle Dock 2
PayPal Here app

Both card readers are good quality. iZettle Reader 2 (image 1) processes 25% faster than PayPal Here (image 2) and looks more modern.

iZettle charges are more competitive

For a card revenue of 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, you pay 1.75% from the first pound you process.

If you take Amex or foreign cards using magnetic stripe, the difference is even more glaring. For Amex using swipe – and other swipe transactions – PayPal charges 3.40% + 20p, and they add a cross-border fee for foreign cards. If the Amex card uses chip or contactless, the fee is 2.75%. These fees are from the Blended fee structure – PayPal also has an Interchange Plus plan, which is more complicated.

PayPal can be convenient for businesses using PayPal’s online sales channels already, but attractive fees are not their biggest selling point.

The card machines are both highly affordable. PayPal Here costs £45 + VAT (occasionally on offer), while iZettle Reader 2, normally costing £59 + VAT, is occasionally available 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 via Bluetooth.

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

Customer reviews

App reviews on Google Play and App Store consistently award the apps highly. PayPal Here currently averages 4.1 stars out of 5 in App Store and 4.4 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. Customers there complain about poor customer service, funds being held, among other things.

iZettle is rated 4.7 stars out of 5 in App Store and 4.3 stars out of 5 in Google Play. On Trustpilot UK, where customers are notoriously ruthless with their reviews, iZettle scores 7.8 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 using PayPal’s online sales channels already. However, 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. Furthermore, they update their POS app regularly with improvements, which cannot be said of all mobile POS apps

Free POS software

What is rather amazing about both is that you get a free point-of-sale (POS) app that can make life easier for a lot of small businesses. Both apps allow you to add products with attributes and images, and categorise them for easy checkout.

That being said, iZettle really excels with their free POS features including in-app barcode scanning and stock level counts. For £39/month per iPad, you can subscribe to iZettle Pro, a comprehensive POS system for cafés, bars, restaurants and other catering establishments. The iZettle Go Plus subscription comes with extended features for £29 a month, including an integrated ecommerce platform (so it’s not just PayPal who can integrate with web shops).

PayPal also offers more features with an additional software integration, which you would need to customise directly with PayPal. Prices start at £20 per month for this. PayPal partners with many POS providers like Vend and AirPOS, enabling them to handpick a solution that’s right for you. The downside is you don’t know what you get before you speak to PayPal, while with iZettle, you can read online exactly what’s included before making a decision.

iZettle Go screens on iPhone and iPad
PayPal Here POS app screens on iPhones

iZettle Go checkout and product library (1) and PayPal Here app screens on iPhone (2). Images: iZettle, PayPal

PayPal ecosystem with online and phone payments

The main advantage of PayPal is that you have the same provider for online, invoice, phone and face-to-face payments. But iZettle is catching up – last year, they added iZettle E-commerce to their Go Plus package, and they’ve had email invoicing for a while. Most recently, they added payment links, which is the option to send a link via text, email or social media, which the receiver can pay through in their own time. However, iZettle does not yet accept card-not-present transactions via phone, mail order or manual entry in the app.

Both companies has a helpful, easy-to-use backend with sales reports 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

A cash advance against future sales is tempting for many businesses – especially when you can apply online and get an instant response. Such a service is open to existing PayPal and iZettle customers, and only after a certain period of time.

PayPal’s acquisition of iZettle is an interesting move that could be another catalyst for iZettle’s innovation and PayPal’s ability to work across platforms internationally.

You pay back the advance through future sales on a chosen repayment plan. 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 through PayPal, having been a PayPal customer for at least 3 months. Eligibility for the loan is based solely on your card 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 your sales to determine whether or not you qualify and how much you can borrow.

Verdict

PayPal and iZettle are both payment industry giants in their own right. Their mobile card readers are viable alternatives to traditional card machines, and the competition between them and rivals has led to sharpened services and (in the case of iZettle at least) lower fees. PayPal’s acquisition of iZettle last year is an interesting move that could be another catalyst for iZettle’s innovation and PayPal’s ability to work across platforms internationally.

But 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 to those who give iZettle a try: take it as read – there’ll be no turning back.

PayPal site
iZettle offer