Paypal announced its plans for its Here card reader back in March, coinciding with the acquisition of Paydiant, a startup for mobile payments. It is finally available at a cost of $149, $99 more than the regular chip and pin version. There has been no mention of a trade-in arrangement for owners of the previous model yet. This move comes as Android Pay is gaining traction among users as they have the convenience of skipping cards altogether. U.S.'s transition to EMV - smart cards with chips instead of magnetic stripes that offer increased security, with the help of VISA and MasterCard was also a major incentive for this announcement. Many business are due to upgrade to support the new modes of payment.
The new reader supports a host of methods along with EMV like NFC, which enables support for Apple Pay, Android Pay, Samsung Pay and more. It hasn't yet dropped support for magnetic strip cards yet. Unlike the previous reader which used to plug into the device's headphone jack, this one pairs with the mobile through Bluetooth, and also has a small LCD display to guide the users through the payment process, making things a lot smoother. This announcement comes as an attempt to be ahead of market trends in the U.S. According to Paypal VP and GM Brad Brodigan, consumers today expect to pay anywhere, anytime and anyhow they please, and this is what inspired Paypal to develop a multifunctional card reader.
Businesses are also preparing for a shift in liability starting October 1, 2015 as any merchant who does not accept chip cards would be liable for any fraudulent activities and scams when customers use their chip cards - a strong incentive for every business to switch over to the new reader. The new Paypal Here reader works in conjunction with the Paypal Here app for iOS and most Android devices and allows businesses to accept MasterCard and Visa payments with a transaction fee of 1.95 percent.
The cost is quite on the higher side for small companies and freelancers, but Paypal has thrown in a nice little treat of its own, offering a $100 rebate to merchants who make $3000 worth of transaction in three months, sweetening the deal, considering the fact that merchants are bound to upgrade to the new payment system at some point.