In a first for the consumer electronics retail industry, Officeworks has begun retailing PayPal's portable, low-barriers-to-entry POS terminal, named 'Here', at its 153 Australian outlets.

Connecting to a smartphone via Bluetooth, PayPal Here is a portable credit card reader and PIN-entry device that can facilitate the transfer of money from a credit card to a PayPal account. It essentially means that anyone with a PayPal account can turn their smartphone into a POS terminal. A farmer selling fruit by the side of the road could accept credit card payments or hobbyist dressmaker at a school fete could start swiping or even a family hosting a garage sale. The Here feeds into the nascent 'anyone can be an entrepreneur' mentality.

It costs RRP $139 outright (for comparison, a Westpac POS terminal can be leased from $50 per month) and then there is a 1.95 per cent service charge on every transaction. It's difficult to get a clear idea of how much banks charge in merchant fees, as they vary depending on the service provider, the amount, the card type and the industry of the merchant, though they are typically anywhere between 1 per cent and 2 per cent. In essence, the PayPal Here has a comparatively low outright cost and transaction fees on the slightly higher end of the scale.

The reason this is interesting is that Officeworks retailing the product nationwide will really boost the Here's profile and encouraging amateur merchants to become more involved in the electronic side of their business. While it's fair to say most inchoate traders these days are accepting payments online in the global marketplace, when face-to-face, it is nearly always a cash economy. The Here levels the playing field and means very small businesses can compete in the convenience stakes with the larger players, making their economies of scale advantages less significant. It's a threat that traditional bricks and mortar retailers must heed.

PayPal Here pricing:

  • 1.95 per cent for credit card payments (via card reader)
  • 2.4 per cent + 30 cents for invoicing
  • 2.9 per cent + 30 cents for credit cards keyed in to the app (without use of card reader)