Our rating(4/5)
PayPal Here is an easy way to branch into face-to-face payments for those selling online as well.
What is PayPal Here? It is PayPal’s very own card readers that fit in your pocket and get you paid directly into your online account. They all work in conjunction with the PayPal Here app 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 transfers to bank account.
  • Best for: PayPal Business users wanting a contract-free card reader for EMV, swipe or contactless payments.

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. PayPal Here card reader

Go to PayPal Here’s sign-up form on the website to register. The service is available to every 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 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 card readers. 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

What PayPal card reader should you choose? The Mobile Card Reader costs $19.99 but it only takes swipe cards. It is a small, triangular magnetic stripe reader that is plugged 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, as swipe is not as secure as EMV or NFC technology.

Photo: PayPal

PayPal Here Mobile Card Reader

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

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 at $24.99, which – as the name suggests – accepts chip and swipe cards only.

Photo: PayPal

Chip and Swipe Reader with the PayPal Here app.

The Chip and Tap Reader costs $59.99 and accepts all the card types including swipe, chip and contactless cards, Apple Pay and Google Pay. It comes with a charging stand suitable for a point of sale (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 signing in the app. With the PIN pad, customers don’t need to use the screen of your tablet or cell phone for PIN entry, instead typing the PIN number directly on the terminal keypad.

PayPal Chip Card Reader

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

The chip and contactless card readers connect wirelessly to your phone or tablet via Bluetooth, so the PayPal credit card swiper is the only one you plug into an audio socket.

PayPal Here fees

None of the card readers have a contractual lock-in, and there are no setup or monthly fees.

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 (EMV) and check-in payment is a fixed rate of 2.7% of the transaction total. This applies to all domestic debit and credit cards.

PayPal Here fees
Account creation Free
Contractual commitment None
Mobile app Free
Swipe, chip, tap, Check-In payments 2.7% transaction fee
Keyed-in, scanned payments 3.5% + $0.15 transaction fee
Cross-border fee Extra 1.5% per transaction
Currency conversion fee 2.5%
Instant deposits to bank account 1% of transfer amount
Refunds Costs the original transaction fee
Chargebacks $20 each
PayPal Here
fees
Account creation Free
Contractual commitment None
Mobile app Free
Swipe, chip, tap, Check-In payments 2.7% transaction fee
Keyed-in, scanned payments 3.5% + $0.15 transaction fee
Cross-border fee Extra 1.5% per transaction
Currency conversion fee 2.5%
Instant deposits to bank account 1% of transfer amount
Refunds Costs the original transaction fee
Chargebacks $20 each

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 entering card details is also possible in the app, costing 3.5% + 15¢ per transaction.

This is the case if you are dealing with a US card. If not, cross-border transactions incur an extra 1.5% fee, i.e. 4.2% for US swipe cards and 5% + 15¢ for foreign-issued keyed card transactions. Non-US cards also incur a 2.5% currency conversion fee if the transaction was paid from a different currency.

If you primarily accept domestic cards in person, the fixed rate without a flat fee (which many competitors like to add) is a favorable fee for low transaction amounts. If there was a fixed fee added, the overall percentage of the transaction fee would become high for small transactions. But if you take many foreign-issued cards, the overall transaction rate can get expensive compared to other card reader companies.

When you process a customer refund, PayPal will charge you the original transaction fee paid for the refunded transaction. Chargebacks incur an admin fee of $20 each.

Photo: PayPal

PayPal Here Chip and Tap Reader with iPad

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

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. 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 and own PayPal app. You can also keep a record of cash and check payments, or send an email invoice directly from the app checkout.

PayPal Here app features

The PayPal Here app is compatible with most iPhone, iPad and Android phones and tablets (e.g. Samsung Galaxy Tabs). iPhones or iPads require iOS 10 or later. Android devices should run Android 5.0 or later.

As to features, you can add products and services to an inventory library that shows as a neat menu in the app so you can tap on items to add them to a bill. You can add a tip (standard or custom), taxes and discounts to the tab too. After each transaction, a receipt can be sent over email or text message or even printed via a compatible Bluetooth printer.

Sales reports and transactions can be viewed in the app, and multiple PayPal logins can be added to separate sales by a team of staff members.

There is at least one difference between the iPhone and iPad versions: the latter offers barcode scanning.

Image: App Store

PayPal Here app

The PayPal Here app gives you basic features for mobile merchants.

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.

Square Reader on iPhone accepting contactless card

How does PayPal Here measure up against alternatives?

We compare the top 5 Square competitors.

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 takes about one business day for a standard transfer.

There is also an instant transfer option for 1% of the transfer amount, but then you receive the deposit in your bank account within minutes.

To spend the PayPal Balance without needing to make manual withdrawals, you should apply for the PayPal Business Debit Mastercard.

The card gives instant access to your online 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.

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. It costs $3 to take out cash at a checkout where a signature is required.

The card can be used abroad to take out cash or pay in shops for an extra 1% fee on top of each transaction amount regardless of whether there’s a currency conversion or not.

Customer service

With PayPal Here, you get 24/7 customer support which is quite good compared to most card reader companies with limited business hours.

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, 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.

Verdict

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 app is very easy to use and enough for a mobile merchant taking cards on the go. If you’re dealing with remote payments, choosing PayPal Here can be a convenient way to keep all transactions together in your sales reports, whether from email invoices, ecommerce or card reader sales.

That being said, the fees can get high with a large proportion of tourists or foreign customers, as the transaction fees for non-US cards are higher than most other card reader companies charge for.

Pros

  • No fixed monthly fee, no setup fee

  • No flat fee on domestic cards (in-person payments)

  • Direct access to online funds with debit card

  • Integration with online payments

  • 24/7 customer support

Cons

  • Delayed access to funds above PayPal’s swipe limits

  • Reserves not easy to predict

  • Cross-border fees on non-US cards

  • Bank account deposits not automatic

  • Customer support so-so