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

By Lucy Harris|2018-09-30T16:38:34+00:00September 30th, 2018|Tags: , |

PayPal Here has certainly improved since it launched in the UK five years ago, but 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.

They work the same way: you need an Android device, iPhone or iPad to download the free app to the device, 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


Full iZettle Reader review
To Website
Get Discount
Device cost
£45 excl. VAT (offers may apply)£59 (£19 excl. VAT through this 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%
Works with
Most iPhones, iPads and Android devicesMost iPhones, iPads and Android devices
Foreign cards
Cross-border fees applyNo additional fees
Payouts to bank account
Instant in PayPal account, then manual transfer to bank account (speed depends on reserves)1-2 business days’ settlement (automatic)
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


PayPal Here
review


iZettle Reader
review
Website
Get offer
Device cost
£45 excl. VAT (offers may apply)£59 (£19 excl. VAT through this 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%
Works with
Most iPhones, iPads and Android devicesMost iPhones, iPads and Android devices
Foreign cards
Cross-border fees applyNo additional 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 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. Apart from being faster, it also looks and feels great.

Both can handle contactless tap payments, chip and swipe. Each comes with a USB cable to charge the battery, and both last 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, 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%.

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 using PayPal’s online sales channels already. However, attractive fees are not their biggest selling point.

The card machines are both highly affordable. PayPal Here costs £45 + VAT (occasionally on offer), 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 small, printed manuals that come with the devices, and both companies offer comprehensive online support and documentation.

Read our full reviewiZettle: 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 3.5 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. 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 8.5 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.

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

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.

But 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 e-commerce 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 that 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.

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 – they recently added iZettle E-commerce to their Go Plus package, and they’ve had email invoicing for a while. What iZettle doesn’t do is customer-not-present transactions. The only remote payments possible with iZettle are the e-commerce and invoice options, so don’t choose them for phone payments, mail orders or manual entry in the app.

Both companies has 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

A cash advance against future sales is tempting for many businesses – especially when you can apply online and get an instant response. The 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 loan 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 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 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 fairly recent 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.

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

To PayPal site
To iZettle offer