PayPal Here Australia Review: Good but a couple of major flaws

PayPal Here doesn’t really stack up. The mobile eftpos machine does not accept EFTPOS cards, there are high costs to move funds into your bank account, and it takes up to 5 days to access your funds.

PayPal Here
Visa
Mastercard
American Express
Apple Pay
Google Pay
Samsung Pay

Our take on PayPal Here

PayPal Here doesn’t really stack up. The mobile eftpos machine does not accept EFTPOS cards, there are high costs to move funds into your bank account, and it takes up to 5 days to access your funds.

Pros

  • PayPal Here is a bargain at $108.90 (incl GST)
  • Purchase the device from the website, sign up on the app, and start taking card payments immediately
  • Funds land in your PayPal wallet and can be used immediately
  • Pair PayPal Here with your smart device and take payments on the go

Cons

  • Does not accept EFTPOS cards
  • There is a 1% fee for transferring money from your PayPal digital wallet to your bank account and it can take up to 5 days for your funds to clear
  • Transaction fees of 1.95% is quite expensive, expect to get closer to 1.00% from banks
  • Multi-currency / dynamic currency conversion not available
  • Least cost routing not available

What is PayPal Here?

PayPal Here is a small mobile EFTPOS machine that connects to a smartphone or tablet via Bluetooth and takes card transactions.

Instead of going to a bank, signing up for a plan and rental a large EFTPOS terminal, you can purchase a PayPal Here card reader online, download the PayPal Here app, and start accepting card payments almost immediately.

Even better, your funds land straight in your PayPal account and can be used for purchases right away.

Hardware

The PayPal Here device is compact, light and perfect for taking transactions on-the-go. The device can read tap and go payments, chip and PIN/insert, and magnetic swipe payments.

The device connects to a wide variety of Apple and Android devices via Bluetooth. Although, it is not compatible with Android tablets.

At 10.3 x 7.1 x 1.8cm the device is a great size to work in tandem with your smart device. However, the small form factor means that there is no built-in receipt printer.

If you want a receipt printer and would rather use PayPal Here at the counter, the device is compatible with various third party tablet stands, receipts printers, and barcode scanners.

Paypal Here Stand

A number of third party PayPal Here stands are available. Credit: Studio Proper

Pricing

PayPal Here Device Cost

PayPal has decided to make PayPal Here available for purchase on the PayPal website for $99 plus GST.

This is a reasonable device cost, especially considering traditional banks will require you to rent EFTPOS terminals for between $20-30 per month. If you do the math, you’ll find that within 4 or 5 months the PayPal Here device will have ‘paid back’ on your initial investment.

Transaction Fees

Paypal is quite transparent with its pricing structure. They offer a blended rate of 1.95% for all Visa, Mastercard and American Express transactions (respective of whether they are domestic or international cards).

You will note that there is no mention of EFTPOS transactions. This is because PayPal Here does not accept EFTPOS transactions. More on that below.

There is no doubt that you will be able to find lower fees for Visa and Mastercard transactions through other EFTPOS machine providers, such as banks. However, if you process a lot of American Express transactions or international cards, PayPal Here’s fees become much more competitive.

Either way, PayPal Here’s clear pricing structure will give you peace of mind that you are not going to be surprised with a huge merchant fee bill.

PayPal Here Transaction Fees.

PayPal Here transaction fees start at 1.95%. Source: PayPal

It is worth noting that manual entry transactions (i.e. MOTO transactions) incur a cost of 2.9% + 30c.

It is not uncommon for higher fees for manual entry, as the physical card is not required to process these transactions and the fraud rate is much higher than normal transactions.

Other Costs

As far as additional fees go, there are not too many. There are no establishment fees, monthly or annual fees, or early termination fees. And there are no lock-in contracts either.

However, there is a $15 chargeback fee. It’s common to see chargeback fees with traditional banks, so this isn’t too surprising. But it is important to note that PayPal’s main competitor, Square, does not charge fees for disputes or chargebacks.

A couple of other fees are worth mentioning. If you accept a payment in a different currency, you’ll pay a 3% foreign exchange fee above the base rate. And you’ll pay 1% to transfer money from your online PayPal account to your bank account.

The 1% transfer fee is particularly painful for merchants who don’t use a PayPal digital wallet for their own purchases. If you want to transfer all your PayPal Here funds to your bank, then you’re effectively paying a ridiculous 2.95% fee per transaction.

Features

Onboarding

One of the major benefits of PayPal Here is the quick and seamless onboarding experience. Most businesses can sign up and start accepting card payments on the same day.

The onboarding process is as follows:

  1. Sign up to PayPal Business. You need a free PayPal Business account to use PayPal Here. If you have an existing PayPal personal account, you can easily upgrade to a business account. Otherwise you can apply for a business account during the PayPal Here application process.
  2. Download the PayPal app. Download the PayPal point of sale app from the Apple store or Google Play store. You can now take a manual entry transaction through the app.
  3. Order a card reader. You can order the card reader from the PayPal website. It should be delivered in 2-3 days. You can now take a card transaction through the PayPal Here card reader.

Payments

As mentioned earlier, PayPal offers a transparent, blended transaction fee of 1.95% for all Visa, Mastercard and American Express transactions. It also accepts mobile wallets like Apple Pay and Google Pay.

However, PayPal here does not accept EFTPOS transactions or  Samsung Pay.

The lack of EFTPOS acceptance is a major issue for Australian businesses. By our calculations, EFTPOS transactions make up about 25.1% of the total value of card transactions. And, although many customers will have an alternative card they can use, it’s a poor customer experience.

The other downside to PayPal Here is that it does not have an offline transaction mode. When the internet connection goes down, other EFTPOS machines will store the customer’s card details and complete the transaction when the internet comes back. But if you’re using PayPal here and the internet goes down, you won’t be able to take card payments.

Omnichannel Dashboards

All payment companies are trying to do the same thing: offer merchants both in-store and online card acceptance through one simple contract, and show all the transaction data in one consolidated dashboard.

Only a few companies have successfully built out omnichannel — but to varying quality: Adyen, Tyro, Square, Stripe (in the US) and also PayPal.

If you use PayPal Here for your in-store transactions and PayPal for your online transactions, then you’ll be able to see everything in one account. This means you get a nice bird’s eye view of your business and easier reconciliation at the end of the day.

PayPal Sales Insights

The PayPal business dashboard gives you a single view across in-store and online transactions. Source: PayPal

Settlement

One of the complaints we hear about traditional EFTPOS providers, such as banks, is that it takes too long for EFTPOS takings to arrive in the merchant’s bank account. And the only way that merchants can improve settlement time is to open a bank account at the same institution as the EFTPOS provider.

One of the main benefits of PayPal is that funds land in your PayPal business account almost in real-time and those funds can be used for purchases immediately.

However, if you want your funds in a bank account, things aren’t as rosy as they seem. It will take between 3-5 days to transfer funds from your PayPal account to your bank account. This is actually longer than traditional provides.

Multi-Currency

Multi-currency (also known as direct currency conversion) is the ability to show the cost of a purchase in a customer’s home currency on the EFTPOS machine.

Direct currency conversion tells the customer the exact transaction value that will show up on their bank statement, thereby reducing the likelihood they are surprised by the cost and dispute the transaction.

Although PayPal accepts foreign cards (at the same 1.95% rate as domestic cards), it does not offer direct currency conversion.

Point of Sale

PayPal offers a free point of sale solution with PayPal Here.

However, PayPal’s point of sale only offers basic features that would probably satisfy a market stall operator or micro business. This includes simple inventory management with photos, invoices via email, sales reports, and user access control.

Larger businesses would most likely require a more fully-fledged point of sale software that includes features such as automatic inventory counting, loyalty and rewards, multi-store functionality, and so on.

Servicing

As we mentioned in our Square Reader review, one of the great benefits of ‘buy your own device’ EFTPOS providers is the servicing experience.

Merchants who use a bank provider will generally rent their EFTPOS machine from the bank at a monthly cost. If there is a problem with the EFTPOS machine, they must call the servicing number and wait until a technician turns up and fixes or replaces the terminal. In the meantime, they can’t accept card payments.

The great thing about PayPal Here is that it’s cheap enough that the merchant can keep a spare device in their drawer. If one PayPal Here device breaks, just bring out the back-up and use that. Simple.