Our rating(4/5)
If you’re already using PayPal Business, PayPal Here is an easy way to branch into face-to-face payments.
PayPal Here offers contract-free card readers that fit in your pocket and get you paid directly in the PayPal account. They all work in conjunction with a payment app run on a connected cell phone or tablet.
  • Highs: No monthly fees. Instant deposits in PayPal account. Integration with other PayPal services. No commitment.
  • Lows: Complicated reserves. Customer service not the best. Cross-border fees. Manual bank account deposits.
  • Best for: Existing PayPal users wanting a contract-free card reader for EMV, swipe and contactless payments.

How does PayPal Here measure up against the competition? We compare the top 5 Square alternatives (PayPal Here included).

How does it work?

Here’s what you need to accept credit cards with PayPal Here:

  1. PayPal Business account
  2. Smartphone or tablet
  3. PayPal Here app
  4. One of the PayPal Here card readers

Go to PayPal Here’s sign-up form on the website to register, or sign up on the phone if you prefer. PayPal Here is available to every individual, business or non-profit with a valid email address, but it does require additional information such as business name, address, city, phone, type of business, category, estimated monthly sales and a tax ID.

You can either order the card reader through PayPal or buy from select retailers, but it has to be one of the PayPal models. Download the app from the App Store on iPad or iPhone, or Google Play if you have an Android device.

The app has an intuitive, easy-to-use interface, and you can do things like managing inventory and edit business information shown on your customer receipts.

Card reader specs

On to the next question: what card reader should you choose? The free Mobile Card Reader only takes swipe cards. It is a small, triangular magnetic stripe reader you plug into a cell phone’s audio jack (not all mobile devices have an audio jack, so check compatibility). This card reader is subject to a special reserve policy where payments are held for 30 days if they exceed $500 in seven days, since swipe is not as secure as EMV or NFC.

PayPal Here Mobile Card Reader

The Mobile Card Reader is small, but only accept magstripe cards. Photo: PayPal

To avoid liability for possible fraud, we recommend picking a model that accepts EMV (chip dip) and ideally contactless. The next model up from the swipe-only reader is the Chip and Swipe Reader, which – as the name clearly suggests – accepts chip and swipe cards only. This costs $24.99, but you get it free as a new PayPal Here customer until July 15th 2019.

Chip and Swipe Reader with the mobile payment app. Photo: PayPal

The Chip and Tap Reader costs $59.99 and accepts all the card types you need – swipe, chip dip and contactless – as well as Apple Pay and Google Pay. It comes with a charging stand suitable for a POS counter if you pay $79.99.

PayPal Chip Card Reader is the priciest model at $99.99. It has an inbuilt keypad for customers entering a PIN code instead of producing a signature. With the keypad, they don’t need to use the screen of your tablet or cell phone for PIN entry, but can type the PIN number directly on the card reader.

PayPal Chip Card Reader

PayPal Chip Card Reader accepts swipe, EMV and contactless. Photo: Vend

Accepted cards and payment methods

PayPal Here allows you to accept credit and debit cards, cash, mobile check-ins, checks and invoice payments. All the most common cards are accepted, including Visa, Mastercard, American Express, and Discover cards. The contactless card readers also accept Apple Pay, Samsung Pay and Google Pay.

The app is set up to accept PayPal check-in, which allows customers to pay using their phone only – no card needed.

You can also keep a record of cash and check payments. The app supports check scanning and acceptance through the camera on your phone.

What about costs and fees?

None of the card readers have a contract or long-term commitment, and there are no setup or monthly fees. Although you can get the swipe-only reader for free, we strongly recommend going for one of the chip and contactless terminals, since swipe is no longer the most secure payment method – but chip and contactless methods are.

The cost of each swipe, contactless/NFC, chip/NFC and check-in payment is 2.7% of the transaction total.

PayPal cost
Mobile appFree
Swipe, EMV, contactless, check-in payments2.7% transaction fee
Key-in, scanned payments3.5% + $0.15 transaction fee
Cross-border feeExtra 1.5% per transaction
Currency conversion fee2.5% fee (not always applied)
PayPal cost
Mobile appFree
Swipe, EMV, contactless, check-in payments2.7% transaction fee
Key-in, scanned payments3.5% + $0.15 transaction fee
Cross-border feeExtra 1.5% per transaction
Currency conversion fee2.5% fee (not always applied)

Although the PayPal Here app is able to scan credit card information, you still need to enter the amount or missing data – such as security code – manually. Manually keying in card details is also possible in the app. Such cardholder-not-present transactions will cost 3.5% + $0.15 for business owners, compared to the 2.7% if processed through a card reader.

This is the case if you are dealing with a US card. If not, cross-border transactions are charged an extra 1.5%, i.e. 4.2% for US swipe cards and check-in payments and 5% + $0.15 for foreign-issued keyed or scanned card transactions. All non-US card transactions may also incur a 2.5% currency conversion fee, but that’s not always the case.

Fund availability and reserves

This is where it will get a bit complicated, but any business owner should be aware of the limitations before signing up.

All magstripe, chip and contactless card transactions are available immediately in your PayPal account – up to a point. With keyed-in and swiped cards, there’s a $500 weekly limit, so if you process more than $500 in keyed or swiped transactions during any rolling 7-day period, the funds above the $500-limit will be held for 30 days by PayPal.

Since manually entered (keyed) payments and magstripe cards carry a higher risk of fraud, PayPal applies more limits to such transactions compared to the more secure EMV or NFC technology. This means that PayPal can apply security measures in the user’s account such as placing a reserve on funds processed in the account.

To give an example, under the first scenario, the first $500 that you, the business owner, accept in swiped transactions during any 7-day period will be available immediately in your PayPal account. However, if you end up making $600 during those 7 days, PayPal will hold $100 for 30 days and release the $200 in your PayPal account on the 31st day.

This is actually the “simple” kind of reserve PayPal applies. Other limits and calculations can be applied – even to EMV and contactless payments – but these are determined on a case-by-case basis by PayPal based on risk analyses.

Withdrawals and PayPal Mastercard

Except for possible reserves, card reader payments go straight in to your online PayPal account’s ‘available balance’. The available balance can be withdrawn, i.e. transferred to your bank account, which can take up to two hours.

If you want to access your money in an instant, you should apply for the PayPal Business Debit Mastercard.

The card provides instant access to your available balance within the limit of $400 per day for cash withdrawals from any ATM.

PayPal Business Debit Mastercard

You can earn back 1% of the cash (i.e. cash back) spent on eligible purchases, limiting purchases to $3,000 per day. The card can help you access funds immediately – but it is also another plastic card to carry around, and you pay $1.50 per ATM cash withdrawal.

Compatibility with iOS and Android

The PayPal Here app is compatible with most iPhone, iPad and Android devices. iPhones or iPads need to use iOS 10 or later. There is at least one difference between the iPhone and iPad versions, though: the latter offers barcode scanning.

You’ll need a microphone jack adapter to use the swipe-only card reader for iPhone 7 and newer iPhones. PayPal does not sell one, so you would need to get one separately. However, the chip and contactless card readers accept swipe cards and connect to phones via Bluetooth, so choosing one of those will not be any hassle for newer iPhones.

Android devices should run on Android 4.1 or later, have a 3.5 mm jack with microphone if using the swipe card reader, and support location services – important for check-ins and – of course – internet access.

PayPal Here is compatible with some Android tablets, for instance Samsung Galaxy Tabs.

PayPal Here Chip and Tap Reader with iPad

Chip and Tap Reader alongside the PayPal payment app on iPad. Photo: PayPal

Customer service

PayPal has received a lot of slack for its customer service, but has reportedly tried to improve its ratings in the last couple of years. PayPal Here offers multiple ways to contact customer support: you can call them, email within the app or get in touch with an agent through an online chat.

The reports for PayPal Here customer service are still mixed. Most negative ratings deals with how PayPal responds to account limitation issues and frozen accounts.

Security and fraud protection

PayPal adheres to PCI-DSS and provides secure transactions through the encrypted PayPal Here card readers and end-to-end encrypted transactions. It also monitors every transaction 24/7 to prevent fraud.

It is worth noting an important aspect of PayPal Here transactions: to get paid, customers need to sign for transactions greater than $25, which will be helpful in defending the business owner in the event of unauthorized transaction claims.

Also, you as the business owner cannot retain, track, monitor or store user data unless you have received the express consent of the customer to store card data. If you do not have such consent, all card data must be completely removed from your system within 24 hours of receiving authorization. PayPal may contact your customers if it is investigating potential fraud.


PayPal Here is best for small-business owners because it’s free to get started and you don’t sign on to an ongoing contract. The card readers are secure, but a large volume of swipe and keyed transactions can be a problem, unless you are fine with PayPal’s 30-day reserves for amounts above the weekly limit. The payment app is very easy to use – enough for a mobile merchant taking cards on the go.


  • No fixed monthly fees
  • Free swipe card reader
  • No setup fee
  • Can turn your iPad into a POS system
  • The app has got more sophisticated


  • Delayed access to funds above PayPal’s swipe limits
  • Reserves not easy to predict
  • Cross-border fees on non-US cards
  • Customer support so-and-so
  • Bank account deposits not automatic
Name of Reviewed Item: PayPal Here US Rating Value: 4 Image: https://www.mobiletransaction.org/wp-content/uploads/2019/05/paypal-here-chip-swipe-reader-app.jpg Review Author:Review Date: