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EcommerceBytes-NewsFlash, Number 2760 - March 14, 2012 - ISSN 1539-5065    2 of 5

PayPal May Launch Point of Sale Device for Small Businesses

By Ina Steiner
March 14, 2012

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PayPal showed off its newly re-designed and re-architected digital wallet, which it will roll out later this spring and throughout the summer, at the South by SouthWest (SXSW) conference on Tuesday - but it is saving bigger news for Thursday.

PayPal is hosting an event in San Francisco on March 15 to "unveil what's in store for small businesses," and one blogger reports PayPal will announce a device that would compete with Square, which has an installed base of one million businesses and individuals.

PayPal Director of Communications Anuj Nayar said he could not comment on rumors and speculation, but said, "what we can tell you is that at the PayPal event on Thursday we will unveil what we believe will be the future of commerce for small businesses."

As described by EcommerceBytes last week, Square's system is an alternative to the traditional brick-and-mortar retailer point-of-sale reader that uses a phone-based network. Square's small rectangular reader plugs into an Android or Apple smartphone and is commonly used by artists, artisans and crafters at shows, as well as by lawyers, musicians, retail stores, vineyards and coffee shops.

Small businesses choosing between a point-of-sale solution from Square and a possible POS solution from PayPal would look at the fees and policies of the two services. For example, Square deposits payments into sellers' bank account the next business day, while many sellers are concerned about PayPal's rolling reserves and 21-day holds that can result in cash-flow issues.

Square charges 2.75% per swipe with no monthly charges and can process Visa, American Express, MasterCard and Discover cards. PayPal charges merchants 2.9% plus 30 cents per transaction.

During his SXSW conference presentation, PayPal Vice President of Global Product & Experience Sam Shrauger said, "Your wallet shouldn't be tethered to any specific device," emphasizing PayPal's focus on the "digital" aspect of PayPal's new wallet as opposed to the "mobile" wallet other companies are devising.

PayPal will begin rolling out the new features of its digital wallet in May, which include spending rules, new ways to organize money, and a grace period in which consumers can change the way they pay for something with PayPal up to 7 days after the purchase. More information is available on the PayPal blog and in this PayPal blog post from last week.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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