PayPal has entered the smartphone app market with its limited release “Here” card reader, a result of project coordination with the San Francisco-based fuseproject that will allow PayPal users to pay using smartphones at participating locations.
The Here card reader plugs into the smartphone’s audio jack, and a small panel flips down from the card reader to prevent the device from pivoting while reading cards. The associated app will emit a sound effect that indicates a successful read and the completion of the transaction, Gizmag reports.
Participating merchants will display the Here logo and business information will be displayed in the PayPal app directory. Merchants will have the capability to send invoices within the PayPal system, complete with security and fraud protection.
The transactions will be subject to a 2.7 percent transaction fee. The Here card reader will first be released in the U.S., Australia, Canada and Hong Kong for IOS 4.0 iPhone users and, eventually, Google Android users, according to Gizmag.
After Here launches in the U.S., PayPal has plans to expand into China and India, Asia’s two biggest consumer markets, over the next 12 to 18 months.
“Today, PayPal is used mainly for cross-border international payments for both countries,” Rupert Keely, senior vice president for Asia Pacific at PayPal, said, according to Reuters. “The plan is to try to enter both markets for domestic payments.”