updated 09:40 pm EDT, Mon March 12, 2012
PayPal may clash directly with Square hardware
PayPal's mobile payment technology may lead to a direct competitor to Square. leaks emerging from GigaOM would have a plug-in reader to let a smartphone, and presumably a tablet, take credit cards through a native app. Other than a possible triangle shape, not much was known about what it would entail besides a launch on Thursday.
The payment company's Anuj Nayar wouldn't confirm or deny the rumor, but hinted that the Thursday event would show "the future of commerce for small businesses." Square's own system is focused primarily on small businesses that either can't afford a full, traditional payment system or work from spaces where plugging into a wall outlet isn't an option, such as a food stand.
It has already been testing with Home Depot in stores. The implementation either uses a physical PayPal card or a combination of phone number and PIN code.
PayPal has fought to regain the relevance in payments it had several years ago, at the peak of eBay's success and before mobile payments took off. Square was targeted from the start at retail and is now on course to handle over $4 billion in payments a year, not only getting ahead of PayPal but cutting into conventional payment outlets like VeriFone. A full mobile payment system would help put PayPal back into contention and could take advantage of a deep, existing payment method.