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PayPal card machine: review

In 2012, PayPal launched their own mobile card reader - PayPal Here - to challenge the likes of iZettle Reader and SumUp Air.

It’s changed a fair bit since then, but how does it compare today?

Let’s take a look:

PayPal Here
Rates and prices
Ease of use
Help and support
Overall
Reviewed by:
paypal here

Pros:

  • Best rates for businesses earning £6,000+/month
  • Easy setup
  • No monthly fees and no lock-in

X Cons:

  • Less favourable rates for businesses earning under £1,500/month
  • Some cards not accepted
  • Customer support can be inconsistent


Jump to:


Rates and charges

With the PayPal card machine, you don’t pay a account monthly charge. Rather, you pay a portion of each transaction to PayPal (merchant rates).

PayPal Here charges summary
Handset £29*
AppFree
Monthly chargesNone
Merchant Rates1.0% - 2.75%
(see below)

* price for May 2018.

You can opt for a blended fee or Interchange Plus fee structure:

Merchant rates
Total monthly salesBlended feeInterchange Plus
Up to £1,5002.75%IC + 2.5%
£1500.01 - £6,0001.75%IC + 1.5%
£6000.01 - £15,0001.5%IC + 1.25%
£15,000.01 - £25,0001.0%IC + 0.75%
£25,000+Prices upon requestPrices upon request

With a blended fee structure, you pay:

  • A set percentage for each transaction
  • An extra fixed fee for some transactions (not altered according to card type)

With the Interchange Plus fee structure, you pay:

  • Interchange charge (IC) - that’s the fee set by Visa or Mastercard, and will be between 0.2% and 2.0% of the transaction
  • A set percentage for each transaction
  • An extra fixed fee for some transactions

If most of your customers are based in the UK or Europe, we recommend the Interchange Plus structure. Interchange fees are capped in Europe, making this a more economical option. The only downside? It can take a couple of days to access your funds. If this is a problem, opt for the blended structure instead.

There are some other charges to keep in mind, too. Although these are generally less of an issue in the UK:

Additional charges
Card payments made by swipe or manually entering detailsBlended rate of 3.4% + 20p
Interchange Plus rate of IC + 3.15% + 20p
Amex card payments (chip and pin, chip and signature, contactless)Always 2.75%
Amex card payments (swipe, entering details manually)Always 3.4% + 20p

What we love about PayPal Here

There’s plenty to love about PayPal Here, including:

1. Quick access to your cash

With the blended fee structure, you can access your funds in your PayPal account instantly. That’s pretty great, especially considering competitors iZettle and SumUp both take two - three business days.

2. Easy to set up

Download the app, order the reader, and you’ll be up and running in minutes. Seamless integration with an existing PayPal Business account is their real USP. Take a look:


Setting up PayPal Here really couldn't be easier, especially if you already have a PayPal business account

3. Great rates for businesses earning £6,000+/month

If you’re taking more than £6,000 in monthly payments, you’re going to be quids in with PayPal Here. The merchant rates offered for this volume and above are far better than close competitors.

4. Transparent fees, no monthly charges, and no lock-in

A great benefit for everyone, but particularly those operating very small businesses. No lock-in means you can easily give PayPal a try and then switch if you change your mind.

5. Practical card reader

It’s nothing new, and it’s nothing flashy, but the PayPal card reader is small, practical, and does the job.

6. PCI compliant, free of charge

PayPal is PCI DSS compliant, and won’t charge you any fees for this. If you take payments over the phone, or use their ‘Website Payments Pro’ feature, you’ll need to make sure that you’re compliant, too.


What could be improved

The PayPal card machine is pretty great, but of course it has some small drawbacks:

1. Withheld funds and freezing of accounts

The biggest gripe among users is PayPal’s tendency to freeze or temporarily withhold funds if you have a sudden, dramatic change in income.

PayPal are an aggregator, which means they are constantly assessing your stability as a company to determine how much of a risk you are. This can be frustrating, of course, but it’s true of all aggregators and is by no means an exclusive problem to PayPal.

High-risk industries should opt for a traditional merchant account instead.

2. Doesn't accept all card types

The PayPal here card reader accepts: Visa, Mastercard, Maestro, American Express, Apple Pay and Google Pay.

The most important bases are covered, but more obscure cards won’t work.

3. Rates less competitive for very small businesses

If you’re taking less than £1,500/month, it’s possible that you could find a cheaper merchant rate elsewhere. However, we think the simplicity of PayPal Here, and the lack of monthly fees or lock-in, still means it’s a great option. You’d only save around max. £15/month with competitors.

4. Slow customer services

There isn’t a dedicated support system for PayPal Here users to separate them from those having issues with other aspects of PayPal, meaning queries can take longer to be answered.


Our verdict

PayPal Here may have some small issues to iron out, but we feel confident recommending it to smaller businesses that need an on-the-go payment solution. As an aggregator, it might never achieve the stability of a traditional merchant account, but if you operate a fairly steady business then don’t let this put you off. It’s an affordable, user-friendly option that stands tall among competitors in terms of both functionality and rates.