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PayPal: SMEs that don’t take cards are missing out on £800m

By Dan Wilson November 13, 2013 - 2:28 am

PayPal Here HomeA PayPal survey shows that small businesses that don’t take card payments are missing out on about £800 million of trade every year.

PayPal are currently promoting their PayPal Here product that makes it easy for anyone to take card payments on the go. Personally, I’d say the £800m figure sounds a little bit small. It’s surely way more than that.

The research says that just over a third (36%) of the businesses surveyed currently accept card payments, with cost being the main deterrent for not taking them. 13% of respondents are put off by high monthly usage costs.

Narik Patel at PayPal, says: “One of the challenges small businesses in the UK face is getting paid. Nowadays few consumers are carrying a cheque book with them, or even cash. This means businesses need to offer consumers alternatives, otherwise they risk missing a sale.”

“Many small businesses have not offered card payments in the past because they’ve been put off by high fees and long-term contracts. We wanted to create an affordable ‘pay as you go’ option for them. We’ve been obsessed over every detail of PayPal Here to make sure it’s right for both British businesses and their consumers. Having made our name as a pioneer of online business, it’s now great to be helping businesses maximize face to face sales.”

The PayPal Here solution is, as we’ve said before, rather neat. A £100 handset allows you to take payments with a smartphone or tablet as long as you can get a decent phone signal on usual PayPal terms. There are no monthly subs or the like.

I’m looking forward to seeing the Paypal Here device and team in action down here in Brighton at the weekend when they will be punting out the service. I’ll report back.

  • mw
    4 years ago

    The greatest barrier for Paypal will be the past experience sellers have of being shafted by ebay (who own Paypal).

  • Gary
    4 years ago

    Unfortunately the card holder has to be present when Paypal Here is used so not much use for mail order services. Why do Paypal charge £20 a month for their mail order and phone card payment service? Surely this could be contract free also?

    • Laura
      4 years ago

      Gary, WorldPay have a similar version of this for £60 for the terminal. And you can either pay a small monthly fee or PAYG on each transaction with them charging you a small %. Although for large volumes the monthly fee works out better as there are no further charges. The money goes into your bank account, but you’ve also got the option to use their online system to process card holder not present transactions, this is included with your account. It’s called WorldPay Zinc, I’ve found it very handy to have an the support from them has been great. Plus the card machine fits in my hand bag! I was put off of the PayPal version due to the £100 fee and not having a screen on the device to show the customer what to do.

  • Gary
    4 years ago

    Could we please have confirmation that Paypal Here can take “cardholder not present” card payments in the UK through a manual key entry?

    There are comments elsewhere on other sites that it can although payment fees are higher. Tamebay is the authority on anything ebay or Paypal so it would be nice to read it here.

    • 4 years ago

      Gary,

      Let me get the definitive details from PayPal. I believe that you can, but I’ll double check.

      dw

    • 4 years ago

      Just received this from PayPal:

      “PayPal Here does enable manually keyed in card payments, although the fee (3.40% + 20p) is higher to reflect the higher risk given it’s not a Chip & PIN transaction.”

    • northumbrian
      4 years ago

      what a load of tosh, paypal has no risk never mind high risk , its the retailer that bears the cost of card not present fraud

  • Gary
    4 years ago

    Thank’s Dan. Wasn’t sure if the “cardholder not present” facility was a USA only feature. Strange that Paypal don’t mention this in their blurb. I’ll sign up to it then and obtain the card reader. The extra £800m of turnover could be useful.

    • 4 years ago

      Happy to help.

      I wonder if they just want to keep it quiet for the time being.

  • northumbrian
    4 years ago

    they are not pushing it because its only a matter of time before you get stiffed using card not present , be ultra careful, there is next to no protection for the retailer from charge back or fraud,

  • Gary
    4 years ago

    I have taken a cardholder not present payment with Paypal Here so can confirm this functionality. You do not require the card reader to do this. The functionality is contained within the app.

  • Cambridge_Blue
    4 years ago

    Thanks to all for this information as we thought this device only worked with a cardholder present.
    Having compared Paypal & WorldPay we prefer the latter as explained by Laura above plus if you use the online account for a cardholder not present transaction you pay the same rate (2.75%) not the higher rate that Paypal will charge you.
    Clearly if you already have a merchant account & VT then you don’t really need this for telephone/online transactions unless you are out and about but if you don’t this is worth checking out.

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