PayPal Takes On Square By Launching Its Very Own Card-Reading Service, Zettle, Into The U.S. Market As Retail Operations Resume

As physical retail is slowly reviving after a pandemic induced slumber, PayPal is setting its sights on wresting market domination off Square’s physical point of sales services. This became clear when PayPal recently announced that it is ready to launch its own card reader, PayPal Zettle, to the U.S. market.

This announcement comes only 3 years after PayPal acquired Sweden’s iZettle, the mobile payments firm oriented at small businesses, for $2.2 billion. Since then, PayPal has tested Zettle in numerous overseas markets from Mexico, Europe to the U.K. With this move, the payment’s giant is placing a big bet on the fact that its customers would probably prefer to stick to the same payments provider when making in store transactions too. As bricks-and-mortar operations prepare to go back into full swing, a third have been noted to not have online presence. Customers of PayPal Zettle will be able to enjoy interoperability on back-office functions such as inventory and order management which will help streamline the many financial functions bricks and mortar stores will grapple with.

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Offering and all-in-one payments and financial operations service on and offline, both to consumers and merchants, will be a key selling point for PayPal over Square. Adding to this, PayPal’s offering has also been found to integrate well with merchants’ existing accounting, order management and back-office systems. Zettle will enable its users the ability to effortlessly transact with consumers wherever they stand, whether they are in store or online from the comfort of their own home. This level of flexibility is a requirement in a post-pandemic world where customers are becoming more accustomed to shopping online and having accessibility of what they need when they want.

Integration will be a critical element of Zettle’s service, understanding that companies now need to have omnichannel, or multichannel capabilities no matter how small, or whether they are community based. Speaking on this Jim Magats, PayPal’s senior vice president of omni payments, shares “we’re excited about a product that can help them (small businesses) accept payments and is integrated with our other services”. He further adds “that back-office reconciliation, when the online and physical world are brought together, means merchants won’t miss a sale or fail to satisfy a customer”.

Merchants can buy their first Zettle card reader for $29, with additional readers being available at $79 apiece. Like with Square, readers will integrate with iPads and iPhones alongside existing POS hardware that the merchant may have. Zettle’s rate for card transactions will be 2.29% plus 9 cents at launch. Conversely, Square has a processing fee of 2.6% plus 10 cents for card payments.