EBay Inc.’s PayPal unit is rolling out a credit-card reader for small businesses outside the U.S., seeking to get a head start on rivals such as Square Inc. and Intuit Inc. while increasing its international presence.

The pocket-sized product, which uses so-called Chip and PIN technology, will arrive in the U.K. this summer, said Hill Ferguson, vice president of global product at PayPal. The company introduced the U.S. version, called PayPal Here, in March last year, aiming to gain the loyalty of cab drivers, interior designers and other small businesses.

PayPal is competing with card readers from Square and Intuit, which are available in the U.S. and Canada. All three help merchants accept non-cash payments on the go for set transaction fees, letting sellers avoid shelling out big sums of money for credit-card equipment. PayPal’s new reader gives the company a way to extend its foothold in e-commerce transactions to small businesses outside the U.S., where it garnered more than half its $145 billion in payment volume last year.

“We’re bringing PayPal Here to market in countries where swiping is not the norm,” Ferguson said in an interview. “It’s a more complicated product because the hardware has to be accredited and certified by banks and regulatory agencies. But the value proposition is the same. We’re helping small businesses sell more stuff.”


The new device, which took 18 months to develop, is enabled with Bluetooth wireless technology and pairs with a smartphone or an iPad, Ferguson said. After merchants use the PayPal Here application to ring up a sale, the customer puts a credit card into the reader and types in a personal identification number, or PIN, which transmits and encrypts payment information.

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PayPal hasn’t announced the cost structure of the product, though it said merchants will incur a fee per transaction with no contractual commitments or ongoing payments. In the U.S., the company charges 2.7 percent per transaction on PayPal Here, slightly less than Square’s rate of 2.75 percent.

PayPal, based in San Jose, Calif., has declined to say how many merchants are using its mobile card reader in the U.S. or how much payment volume the device contributes. Square, started in 2009, has 3 million merchants using its stamp-sized swiper and transacted $10 billion in payments on an annualized basis in January.