PayPal Here review – What’s the draw?

By | 2017-10-09T04:18:55+00:00 April 21st, 2017|Tags: |
Our rating(4/5)

If you are already using PayPal for payments online, and are happy with the experience, PayPal Here is an easy way to branch out to face-to-face payments.


  • No fixed or monthly fees

  • Instant funds on PayPal account

  • Chip and swipe in one card reader

  • Integrates with other PayPal services


  • Chargeback fee of $20

  • No offline mode

  • The usual PayPal objections: account holds and customer service

After Square stepped into the mobile payments industry in 2010, another renowned player, PayPal, launched an almost identical solution for transforming your smartphone into a mobile POS two years later.

How does PayPal Here measure up in 2017, and what are the cons, if any? In this review we dig deeper. 

How does it work?

To start accepting payments from customers with credit or debit cards, small-business owners need to own a smartphone or tablet (more details on which models are compatible follow later in this review), have a PayPal account (of course), download the PayPal Here app from the App Store or Google Play, and obtain the card reader.

Customers have two possibilities: they can either order the reader for free through PayPal or buy one from select retailers – hopefully from a location near them – and get $15 back after they sign up.

The mobile swipe card reader isn’t a small white square: what you plug into the headphone jack it a big blue triangle, and it has a hinged plastic panel that keeps it stable when in use by pivoting down over the front edge of the phone.

The chip card reader – yes, you need that one too not to be liable for possible fraud – costs $79, and will also enable you to take chip cards.

The app comes with a clear, intuitive, easy-to-use interface. The app also allows business owners to provide basic information about their business, which will appear on customer receipts, and also comes with the ability to manage inventory.

You may also like: Square vs SumUp: which one is best for your business? 

Cards and payment methods

PayPal Here allows small-business owners to accept credit and debit cards, cash, mobile check in, checks and invoice payments. All the most common cards are accepted: Visa, MasterCard, American Express, and Discover branded credit and debit cards.

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

You can also keep records of cash and check payments. The app supports check scanning and acceptance, using the camera on your phone.

PayPal Here costs

As we mentioned before, the card reader can be obtained for free without signing a contract or long-term commitment, and there are no setup or monthly fees.

The costs per transaction are: for each swipe, chip, tap or check-in, PayPal will charge its business owners 2.7%, and you should get the card reader, because it will help you save money.

While the PayPal here app is able to scan credit card information, you still need to enter the amount or missing data – such as the security code – manually. Such cardholder not present transactions will cost 3.50% + $0.15 for business owners, compared to the 2.7% if you use the card.

This is the case if you are dealing with a US card. If not, cross-border transactions – both swipe and check-ins – are charged at 3.7%, while keyed or scanned transactions will cost you as a business owner 4.5% of the amount + $0.15.

Fund availability and withdrawals

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

Theoretically all magstripe, chip and contactless card payments are available immediately in the receiving PayPal account, except once the accounts exceed a $4,000 weekly limitAmounts received (swiped) above $4,000 will be allocated to your account after 30 days.

If you have more than $2,500 in keyed transactions or scanned transactions during any rolling 7-day period, your funds will be delayed by 30 days by PayPal. Since manually entered (keyed) payments carry a higher risk of fraud — because swiping a card involves an additional layer of security — PayPal applies further limits to such transactions.

This means that PayPal can take actions in regard to the user’s account such as placing a reserve on funds held on the account, and that even includes swiped transactions:

To summarize, under the first scenario, the first $200 to $4,000 that you, as a business owner, accept in swiped transactions during any 7-day period will be available immediately in your PayPal account.

Under the second scenario, the 30 days delay for swiped transactions over $4000 for 7 days can go up to 60 days, or under the third scenario, all of the payments a business gets can be put on hold for a certain period. It is customized depending on the type of account the business owner opens and the specific risk analysis applied by PayPal.

The available balance can be withdrawn. If you opt to transfer funds to your bank account, this will typically take up to 5 business days.

paypaldebitcardBut if you want to access your money in an instant, you should apply for the PayPal Debit MasterCard Business Card issued by The Bancorp Bank, based in Wilmington, Delaware.  To qualify, businesses need to have operated the account in good standing for 60 days.

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

You can earn back 1% of the cash spent on eligible purchases, limiting purchases to $3,000 per day. The card can help you access funds, but it is another plastic card you need to carry around and remember the PIN number for, in addition to taking transaction fees into account when withdrawing money, currently at $1 per withdrawal.

Compatibility with iOS and Android

Before jumping into PayPal Here, check if the app is compatible with your device. The app is compatible with most iPhone, iPad and Android devices. iPhones or iPads need to use iOS 7.0 or later.

Like with Square, you’ll need an microphone jack adapter to use the basic card reader for iPhone 7. PayPal does not sell one, so you would need to get one separately. The Chip card reader does accept swipe cards though, so the swipe reader has little added value given the hassle for iPhone 7.

Users owning an Android device should keep in mind that the device needs to run Ice Cream Sandwich (Android 4.0) or later, have a 3.5 mm jack with microphone (for the swipe card reader), and support location services – important for check-ins – and, of course, have Internet access.

PayPal Here is now compatible with some Android tablets, such as several of the Samsung Galaxy Tab ones. There is a difference between the iPhone and iPad versions: the latter offers barcode scanning and inventory listing features.

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 access customer service: you can call them, contact them via email within the app, or get in touch with an agent through online chat.

The reports for PayPal Here customer service is 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 with the help of the encrypted PayPal Here card reader 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 transactions greater than $25, which will be helpful in defending the business owner in the event of unauthorized transaction claims.

Also, you as a 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 available for every individual, business, or non-profit with a valid email address, but it does require some additional information such as business name, address, city, phone, type of business, category, estimated monthly sales, and (optionally) a tax ID.


  • No monthly fees
  • Free swipe card reader
  • Multiple ways to access customer service
  • Can turn your iPad into a cash register
  • The app has gotten pretty sophisticated


  • Limited, delayed access to funds. To get instant access to the available funds, you need to apply for a card, which carry fees for use.