PayPal planning to compete with payment service app Square, rumor says

PayPal might be king of the online payment plans, but a recent rumor suggests the eBay-owned company is eyeing the mobile competition, and plans to take the battle to your iPhone.

According to a story from GigaOM, PayPal is planning a service to rival mobile payment app Square, which allows users to turn their iPhones and iPads into mobile credit card readers for completing transactions. The story says that PayPal is planning the announcement on Thursday and intends to jump into a shark tank that includes Verifone, Intuit, Square and others in an attempt to control mobile payments before they really ramp up.

GigaOM says that PayPal intends to produce a dongle that will allow users instant access to their PayPal accounts, even when purchasing items in a brick-and-mortar retail store. Waving the dongle over certain specialized terminals or keypads will allow retailers to instantly gain information that allows them to bill a customer?s PayPal account for a transaction, rather than forcing those users to rely on credit cards and other methods of payment.

It makes sense that PayPal might be moving toward a universal dongle system. Earlier this year, it tested a mobile payment platform that allowed users to scan a PayPal card or use an iOS or Android app to access their PayPal accounts, making payments at specialized Home Depot stores. The dongle rumor is pretty well at odds with a mobile app, but it seems a logical step in the progression.

GigaOM also claims that in addition to moving into consumer payment capabilities through the use of dongles or apps, PayPal also is intending a push toward the business side of transactions. GigaOM says PayPal is going to introduce an attachment for iOS devices that allows users to scan credit cards or specialized cards to make payments to vendors, much like the current system offered by startup Square.

PayPal includes some 100 million account holders, so it?s probably very true that retailers will go for a company they know and one with a huge user base and following already. With the release of an in-store payment device that takes off, and a device that allows anyone to accept a credit card payment, like Square does, PayPal may well be in position to take on all other major competitors before service such as Google Wallet really ramp up.

The PayPal announcement event is set to take place on Thursday in San Francisco. We?ll know more then.

Source: http://www.appolicious.com/finance/articles/11324-paypal-planning-to-compete-with-payment-service-app-square-rumor-says

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