PayPal grabs its own share of 'mobile' payment market

The device, called "PayPal Here", comprises a mobile phone application and a thumb-sized triangular card reader that can be attached to the audio jack of a smart phone.

Using the combination, a merchant or tradesperson can swipe the card through the card reader that is plugged into the smart phone, and accept payments via PayPal.

Credit-card reading devices that can be attached to mobile phones are already available from Square and VeriFone.

PayPal launched its device on Friday in Australia, Hong Kong, the United States and Canada.

Further rollouts will follow in the Asia-Pacific and Europe.

PayPal's head of new ventures in the Asia-Pacific region, Brad Paterson, said the device was specifically intended for small businesses, especially those that may have employees "on the road".

The device would be useful to people such as as plumbers, electricians, masseuses, sales people or operators of market stalls.

"If a consumer wants to pay with a credit card, that merchant will now be able to accept that credit card and not have to turn that customer away if they don't have enough cash," Paterson said.

Paterson said most of the Australian economy was based upon small businesses.

"A lot of them are becoming very mobile," he said.

"Cash use is in decline. People are looking to use new forms of payment, and more than 50 per cent of small businesses are now using a smart phone.

"They're using it for all parts of their business, not just for payments, but for booking appointments, location-based services, and other things."

Paterson said Australia was one of the best places to launch the device because it had the second highest penetration of smart phones in the world.

He said the device would initially be compatible with Apple iPhones but in the near future would also be available for use on all Android devices.