PayPal has unveiled a new piece of hardware that will make it easier for retailers and in-store merchants to accept contactless card payments, such as Apple Pay, Android Pay, and EMV-enabled cards. The PayPal Here Chip Card Reader has been unveiled to US customers and is aimed to make the transition to these brand new payment options much smoother.
For those merchants who hoped to receive this device at a cheap price, there is a harsh reality to face. Even though the PayPal Here Chip Card Reader will be offered at the price of US$49 to US retailers, they will only be deemed eligible for this offer if they process at last US$3,000 worth of payments within the first three months.
That amount may not seem all that big for most companies, but small businesses might be struggling to reach this threshold in the allotted timeframe. If this target can not be met, the retail price of the PayPal Here Chip Card Reader will be US$149. Albeit this is still a fairly low price for infrastructure upgrades, the question becomes whether or not the benefits outweigh the costs.
Furthermore, owners of the Paypal Here Chip Card Reader will need to have the PayPal Here application installed on a smartphone. With this application, the retailer will have to generate an invoice for the customer’s order, after which all of the available payment methods will be displayed on the PayPal Here Chip Card Reader. Available options will include contactless card payments, card swiping, or tapping the screen for mobile payments such as Apple Pay.
Last but not least, there is no monthly fee associated with this new payment initiative by PayPal. However, every swiped card payment will be subject to a 2.7% fee, allegedly making it fairly competitive with similar card readers designed for small businesses. Whether or not many users will flock to this piece of hardware, remains to be seen, as not everything is as rosy as PayPal wants you to think.
At first sight, the PayPal Here Chip Card Reader seems very flexible in terms of supported payments, which include cash and checks. But in reality, this small piece of hardware, which retailers need to invest in, seems to make paying for goods and services unnecessary complex for the everyday consumer.
The entire concept of the PayPal Here Chip Card Reader seems to be taking a page out of the Bitcoin playbook, by enabling contactless payment methods. However, the implementation of PayPal’s idea is utterly clunky, far from user-friendly and seems to be missing the entire point of using contactless card payments.
To use an EMV-enabled card with the PayPal Here Chip Card Reader, consumers have to tap their card on the device’s screen. This is not a contactless payment method, as there is clear contact being made between the card and the device. Granted, the card chip is not being read by the machine, but PayPal is checking the wrong boxes in this regard.
Bitcoin payments are far more user-friendly and require no additional infrastructure to be processed by the retailer. All they need is an internet-connected device, just like they will need for the PayPal Here Chip Card Reader. However, there is a far lower fee associated with Bitcoin payments – if any – and payment can be converted to fiat currency payouts to a bank account the very next day.
What are your thoughts on the PayPal Here Chip Card Reader? Let us know in the comments below!
Images courtesy of PayPal, Shutterstock
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