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PayPal debuts Here: mobile payments system for the masses

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PayPal Here is a mobile payments system that will allow small businesses to accept payments through a smartphone. It's a direct competitor to Square.

PayPal today announced Here, a mobile payments system that will allow small businesses to accept payments through a smartphone.

Much like the service Square, PayPal Here accepts debit and credit cards via an encrypted, thumb-sized card reader. It also can use a phone's camera to scan and process cards or checks.

The concept is simple: customers get to use their preferred mode of payment; merchants get to accept exactly that, plus invoice directly from a mobile app; PayPal makes money (2.7 percent; Square is 2.75 percent) by using its traditional web-based service as the anchor.

PayPal is billing their service as the world's first global mobile payments system, a dig at the more popular Square, which as a startup does not have the scale to match. It will be available on Apple iOS and Google Android devices.

There's no question that PayPal has significant weight to throw around in this arena; what must be proven is merchants' willingness to adopt the device. Based on Square's reception, retailers seem to have interest in the technology -- the question is how many dongles (and accounts) they care to have on the way to generating revenue in unlikely places.

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Andrew Nusca

Editor Emeritus

Andrew Nusca is editor of SmartPlanet and an associate editor for ZDNet. Previously, he worked at Money, Men's Vogue and Popular Mechanics magazines. He holds degrees from the Columbia University Graduate School of Journalism and New York University. He is based in New York but resides in Philadelphia. Follow him on Twitter. Disclosure