PayPal Unveils Plans For NFC Card Readers

Almost two years after PayPal launched a handheld payment card reader for merchants in the U.K., that’s finally coming to the U.S. — and this time, it will support contactless payments and Apple Pay, too.

PayPal announced the new reader at Mobile World Congress in Barcelona on Monday (March 2). The device, which PayPal is still calling the PayPal Here Chip and PIN reader, pairs via Bluetooth with an iOS or Android smartphone or tablet running the PayPal Here app. It’s about the size of a pocket calculator, has a small screen, a 13-key keypad, a slot for accepting EMV chip cards and an LED to indicate when it detects a contactless payment card or other NFC device.

PayPal plans to roll out the reader in the U.K. and Australia this summer, and for U.S. merchants later in 2015, but didn’t say how much the device will cost. However, the current U.K. EMV PayPal Here device sells for £69.96, or about $108, according to VentureBeat, which speculated that the new NFC version will run between $100 and $200 in the U.S.

Transaction fees are roughly the same as for the old U.K. device. In U.S. terms, that means a 2.7 percent fee for a card swipe, 3.5 percent plus 15 cents for a manually keyed transaction or a scanned card, and an extra 1 percent cross-border fee for non-U.S. cards, according to PayPal. (Yes, that does say that both contactless cards and mobile payments will pay the same higher fee as a Card Not Present transaction. Apple negotiated lower rates for Apple Pay’s NFC transactions with banks, but PayPal didn’t say whether it has agreed to give Apple Pay transactions the same deep discounts.)

While the new PayPal Here reader was clearly designed to be a do-everything device for payments, PayPal has actually made things at least a little more complicated for itself while it was getting the reader ready to go: On Monday, PayPal also announced it has agreed to acquire Paydiant, whose version of mobile payments doesn’t necessarily lend itself to a card reader.