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PayPal to Launch Mobile-Payment Service in the U.K.
February 22, 2013
PayPal announced it will release a European version of its PayPal Here device, a Square-like peripheral that allows small merchants to accept debit and credit cards more efficiently. The device, which fits around an iPhone and Android-base phones, initially will launch this summer in the United Kingdom. PayPal eventually plans to expand across Europe following the success of PayPal Here in Japan and Australia.
While the device bears a passing resemblance to those in launched in Asia, the European version of PayPal Here was entirely rebuilt for the European chip-and-PIN environment. But as more countries migrate to EMV, the European device could become the forerunner for PayPal in the mobile-payment market in the future. According to PayPal, it will charge merchant a “nominal” fee for the device. Industry observers estimate merchants will have to pay up to £100 (US$153) to use PayPal Here, in addition to a likely 2.75 percent transaction fee.
From a Reuters article:
“The market for these solutions is becoming increasingly competitive and PayPal Here is not the first of its kind in Europe, where the likes of iZettle, Payleven and mPowa have already launched,” says Eden Zoller, an analyst at research firm Ovum. However PayPal may be able to make significant inroads in the British market, “…PayPal has an advantage in being an established, trusted payment provider with a high profile global brand,” continues Zoller. Furthermore, outside of the U.S., the U.K. represents PayPal’s biggest market with over 18 million active users, reinforcing the company’s position in the U.K.
In recent years, the point-of-sale terminal has transformed from a big bulky necessity to something one can hold in his or her hand. Competition from companies such Square in the United States as well as international competitors such as iZettle will make life difficult for PayPal Here in foreign markets. Only time will tell if PayPal’s brand strength is enough to make inroads in an increasingly competitive market.
to read more from Reuters.
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