PayPal Here goes on sale at AT&T stores

PayPal is now selling its PayPal Here credit card reader at 1,800 AT&T Mobility (NYSE:T) stores across the country. The partnership represents PayPal Here's first U.S. retail deal.

PayPal Here enables small businesses and other users to process credit and debit transactions by swiping cards through a triangle-shaped dongle that attaches to their smartphone or tablet. Users also can access their mobile device's camera to scan and process cards and checks. PayPal Here charges merchants a flat rate of 2.7 percent per transaction, a .05 percent savings over rival Square's mobile payment offering.

AT&T is selling the PayPal Here dongle at $15, with a $15 rebate offered followed account signup. The dongle is compatible with dozens of AT&T devices, including Apple's (NASDAQ:AAPL) iPhone and iPad as well as a host of smartphones and tablets running Google's (NASDAQ:GOOG) Android.

AT&T's decision to market PayPal Here to its subscribers is intriguing given that the operator is also involved in Isis, the contactless payment joint venture rolling out in partnership with AT&T, Verizon Wireless (NYSE:VZ) and T-Mobile USA. While Isis relies on Near Field Communications technologies instead of a dongle-based approach, PayPal Here nevertheless poses a competitive threat to the operator-led effort, and now the PayPal Here reader will be available in the same stores that also sell AT&T's Isis-ready smartphones.

PayPal Here launched in March 2012 and signed up more than 200,000 merchants within its first month of availability. In addition to direct online sales, PayPal also offers the dongle at Japanese electronics retailers in partnership with operator Softbank.

eBay-owned PayPal is on pace to handle $10 billion in mobile payment transactions in 2012, an increase of 150 percent over a year ago. In addition to PayPal Here, the company is currently conducting mobile wallet trials across American retail chains including Home Depot, Abercrombie & Fitch, American Eagle Outfitters, JCPenney, Foot Locker, Office Depot and Toys "R" Us.

PayPal Here rivals include Square--its own dongle is sold at roughly 20,000 U.S. retail locations including Apple, Best Buy, OfficeMax, Radio Shack, Target and Walmart stores. Square charges a flat fee of 2.75 percent on all transactions and promises users no contracts, monthly fees or hidden cost. The Square reader retails for $9.95, and new users receive a $10 rebate upon signup.

As of June 2012, more than 2 million businesses and individuals across the U.S. are using Square's mobile payment services--the firm now processes more than $8 billion in payments on an annualized basis, up from $1 billion just a year ago. Last month Square closed a Series D financing round totaling about $200 million, valuing the startup at $3.25 billion.

For more:
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