According to a rumor posted by GigaOm, PayPal is expected to release a mobile payment dongle that would enable users to process credit card transactions on their smartphone. The device, which might be triangle shaped, will be very convenient for individuals and small businesses alike.
However, PayPal decline to comment further about it. Anuj Nayar, the company’s spokesperson only shared that they will only reveal what they believe will be “the future of commerce for small business.”
Credit Card Expansion
Whether it’s just a rumor or something that PayPal is really working on, the mobile payment dongle goes in line with their intent to expand into credit card territory. Recently, the payment processor tested a program that will bring its payment methods to brick-and-mortar stores.
In partnership with Home Depot, the program was tested to its over 2,000 store locations at the San Francisco Bay Area. PayPal integrated its software into the retailer’s existing point-of-sale terminals, which allow customers to swipe their PayPal pre-paid card or by entering their mobile phone number and PIN.
PayPal intends to add 20 more retailers that will use this payment process by the end of the year. Other than that, they’re also planning to expand their scope across the country. However, the program is only applicable to businesses with existing hardware.
PayPal vs. Square
The release of mobile payment dongle will put the eBay owned payment processor in competition with Square. As of the moment, Square is handling an annual payment volume of $4 billion.
Additionally, they also released an iPad application called Square Register. Aiming to replace the retailers’ cash register, the Square Register allows stores to accept payment using a Square card reader attached to the iOS device.
Nevertheless, a mobile payment tool similar to Square will allow PayPal to provide smaller businesses with a simple way to process card transactions.
PayPal has been boosting its efforts to win over small stores to become a dominant player in the retailers’ market. The payment processor holds more than 100 million accounts, and is popular when it comes to online payment.
However, it’s not the same story when it comes to in-store payments. A mobile payment dongle can change PayPal’s fate when it comes to handling transactions on brick-and-mortar locations. Through this device, it seems that the payment processor is trying to improve its standing with small retailers.
But whether merchants will accept this new payment method remains to be seen. The mobile payment dongle is said to be unveiled at the company’s San Francisco event on Thursday.