Throughout the world, there are currently two major players when it comes to mobile Point of Sale (mPOS) payments and smartphone processing solutions: PayPal Here and Square. Though they are not currently available in Africa, we'll take a look at them.
PayPal Here: Global Giant
PayPal Here is owned by internet superhero, Ebay. PayPal Here may provide easy access to nearly 140 million PayPal users worldwide. But that is not their only benefit.
PayPal Here offers free startup (including the POS reader, which plugs into a smartphone’s microphone) with iOs and Android device support. However, they require a credit check and a background verification, which may not be ideal for many businesses.
As of the last quarter of 2015, PayPal Here has officially rolled out its mobile Chip Card Reader. The reader which is compatible with iOS and Android devices accepts chip cards (both EMV chip-and-PIN and EMV chip-and-signature) and other NFC transactions like Apple Pay, Android Pay and Samsung Pay. This is in sync with the global trend set by the main credit card companies - replacing credit cards to EMV ones.
With Paypal Here, funds are available immediately in a PayPal account and can be used for online purchases or withdrawn at an ATM using a PayPal debit card. Alternatively, users may opt to transfer funds to their bank accounts, but this option may take a couple of days.
PayPal Here offers many customer service options, including phone, email, and community support, as well as an online developer community. PayPal Here’s security features encryption within the card reader, as well as at the data transmission layer.
PayPal Here brings reduced costs, flexible customer service, and security features to the mPOS marketplace.
Square: Mobile Payment Processing Solution
Square, a San-Francisco-based brainchild of Twitter Co-Founder, Jack Dorsey, has been available since 2010.
Currently, Square offers benefits very similar to those of Paypal Here: free startup and multi-system support, readers and transmissions secured by encryption.
One interesting feature that Square offers is a flat rate of $275 per month (for those who prefer, they also offer a 2.75% fee). However, the flat rate has many restrictions, so be sure read up before you Square up.
Square does not require a credit or background check for opening new accounts.
Unlike PayPal, Square offers no check processing option and no phone support.
Square may have a solution for businesses that are concerned with the background and credit checks required by PayPal Here or for those who can benefit financially from the flat rate fee.
One of Squares strongest appeals is its Square Capital program, a merchant advance cash program which already advanced small businesses over $230 million helping them to grow.
As of November 2015 Square accepts Apple Pay and chip cards (EMV) in local businesses across the US. This is still limited to a select number of locations but expected to grow very soon. This puts Square in a very good starting position against its competitors, as IPO is expected to launch soon.
As global leaders in mPOS solutions these two giants dictate the pace of both technological advances and service standards development. It will be very interesting following the arms race between them and how both merchants and end users benefit from it.
Eran Feinstein is the founder of 3G Direct Pay Limited, a global e-commerce and online payments solutions for the travel and related industries. With over 14 years of leading technology, sales, marketing and operation teams Eran is an authority in the East African e-commerce and payments arena. He's also an avid marathon runner.