PayPal Here Review

Overall Rating Breakdown
Sales & Marketing Tactics
Costs & Contract Terms
Complaints & Service
BBB Rating

PayPal Here Overall Rating

"B+" Credit Card Processor Rating

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PayPal Here Card Reader

PayPal Here Reader

PayPal Here Overview

PayPal has thrown its hat into the mobile payment acceptance arena with its launch of the “PayPal Here” mobile payment app and card reader. The service is yet another carbon copy of other mobile credit card processing services like Intuit’s GoPayment, Jack Dorsey’s (founder of Twitter) Square and North American Bancard’s Pay Anywhere, but, of course, PayPal Here has its own spin on the idea.

PayPal Here’s chief innovation is that it is integrated into a regular PayPal account and, therefore, merchants have access to a wide range of other features not found with most competitors. Funds from PayPal Here transactions that fall within normal risk tolerances will be available immediately to the merchant within his/her PayPal account. Merchants have the choice of transferring the money into an attached checking account or using an attached debit card to make purchases and ATM withdrawals. PayPal boasts that by accessing the funds through purchases with its “PayPal Business Debit Card,” merchants will receive a 1% cash back bonus and can bring their effective processing rate down to as low as 1.7%. GoPayment also offers the option of using a debit card to access funds and Square only offers automatic fund transfers to attached checking accounts.

The biggest standout features that PayPal Here brings to the table are the ability to accept electronic check payments, create and send digital invoices, and track cash payments all within the app. Most of these features were already available through a normal PayPal account.

PayPal Here Sales & Marketing Tactics | A+

Key Points – Sales & Marketing 
Uses independent resellers? No
Promotes deceptive rate quotes? No
Discloses all important terms? Yes

Because PayPal is such a high-profile company, PayPal Here is marketed primarily through the PayPal website. The PayPal Here website is easily navigated and clearly outlines the terms of PayPal Here, including a notice regarding the keyed-in rate of 3.5% plus $0.15. Merchants are advised to bear in mind that key-in transactions almost always carry a higher transaction fee because they are higher-risk transactions than swipes.

PayPal Here Marketing Example

PayPal Here Costs & Contract Terms | B

Key Points – Costs & Contract Terms
Swiped rate: 2.7%
Keyed-in rate: 3.5% + $0.15
Termination fee: None
PCI compliance fee: None
Equipment lease: Variable

Like most of its competitors, PayPal Here offers a free card reader and app that is compatible with most iPhone and Android devices. The swipe fee for processing a VISA or MasterCard transaction by sliding a card through the attached reader is a flat percentage of 2.7%, and the keyed rate is 3.5% + $0.15 per transaction.

Upon further inspection, PayPal Here had some caveats in its pricing that apparently expired on April 15th of 2012. For instance, PayPal Here charged 3.5% for swiped American Express cards but was rebating merchants the difference to bring the final fee down to 2.7%. It appears that the rate for all cards, including American Express, is now lowered to 2.7%. Additionally, merchants who already use PayPal’s Virtual Terminal may see an increase in their pricing as all Virtual Terminal Transactions are subject to a rate of 3.5% + $0.15, which also applies to Key-In PayPal Here transactions. Lastly, merchants who already use PayPal Pro products may see a decrease in their pricing as all PayPal Payments Pro transactions are charged the 2.7% that applies to Swiped PayPal Here transactions. It’s a little confusing, but these may be the issues if merchants notice any pricing discrepancies.

In order to deal with fraud risk, PayPal Here handles its merchant processing limits and fund holding procedures in a very similar fashion to Square. Merchants who key in more than $2,500 in sales within any rolling seven-day period will have the funds over $2,500 held in a reserve for 30 days before they are released (details available in section 8 of this document). Also like Square, this limit does not apply to swiped transactions, of which the exact processing limits and reserve procedures are ambiguous and based on “risk” factors.

Related: Best Credit Card Processing Apps For Real Businesses

PayPal Here Complaints & Service | B

Key Points – Complaints & Service
Total complaints: 70+
Live customer support: Yes
Most common complaint: Fund holds

We have located approximately 70 PayPal Here negative reviews, some of which accuse the service of being a ripoff. By far the most common issue encountered by merchants appears to be fund holds by PayPal, which is a problem that PayPal Here has in common with its parent company. Merchants are cautioned to understand PayPal’s fraud prevention policies in order to avoid having accounts frozen or funds withheld.

One of the biggest frustrations merchants have with Square is the lack of live customer support and communication regarding reserves and fund holds. PayPal Here has both live phone and online support; however, it is difficult to determine how the company handles communication regarding holds and reserves, and how the customer support fares with the new service. PayPal itself has a very high volume of online complaints, but it is also a huge company that services many merchants, some of whom might be uninformed and easily frustrated. GoPayment and PayAnywhere both offer live phone support and do not seem to suffer from as many complaints regarding holds. The comments located here and elsewhere that specifically discuss PayPal Here do not seem to have an issue with its customer support, so PayPal Here will receive a “B” in this category until further information is available.

PayPal Here BBB Report | C (CPO Adjusted)

Key Points – BBB Report
Product/service: 3,320
Billing/collection: 1,636
Advertising/sales: 739
Guarantee/warranty: 132
Delivery: 96

Since PayPal Here is an app created by PayPal, there is no Better Business Bureau (BBB) report specifically for PayPal Here. The BBB report for PayPal, however, shows accreditation and an “A+” rating despite having 5,982 complaints filed in the last 36 months. Of the complaints, 3,320 are related to problems with the service, 1,636 with billing and collection, 739 with advertising and sales issues, and 300 with other issues. The BBB justifies the high rating with the length of time PayPal has been in business, the complaint volume versus PayPal’s size, the company’s response to complaints, the rate of resolution of those complaints, and the fact that the BBB has sufficient background information on PayPal. The CPO-adjusted BBB rating for PayPal is a “C” as of this update.

Bottom Line

With its already 106 million registered users, PayPal stands to be a major player in the mobile payments arena with PayPal Here. The app seems to be holding its own in the face of numerous competitors and rapid changes, but we will be sure to monitor PayPal Here and update as necessary.

This review was originally published on 3/16/12 and was last updated on 7/14/14.

Leave your review of PayPal Here in the comment section below:

PayPal Here Review

Rated 3.625 Out of 5 Stars
Reviewed by Phillip Parker
Reviewed on 2014-07-14 14:28:49

There are over 70 negative PayPal Here reviews in the comment section of this review… PayPal Here handles its merchant processing limits and fund holding procedures in a very similar fashion to Square. Also like Square, the service’s processing limit does not apply to swiped transactions, of which the exact processing limits and reserve procedures are ambiguous and based on “risk” factors… Learn more in this PayPal Here review.

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About the author

Phillip Parker

Phillip Parker is a former merchant services agent turned small business advocate and the author of "Fee Sweep," which teaches merchants how to dramatically lower their processing rates, eliminate junk fees, and avoid fine-print scams. He founded to help merchants enact positive change in the credit card processing industry.

Phillip can help you find an ethical and honest processor that will offer you great rates. Click here to request a free provider consultation.

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  1. Marilynne Lipshutz

    When customers purchase a gift certificate now, the funds are immediately placed into merchant’s account.
    In the past, Paypal withheld gift certificate funds until the customer “redeemed” the gift on line via their own account.
    If the gift recipient does not have a Paypal account, they would be unable to redeem it. In fact, after countless hours trying to resolve this unneccessary complication, most people gave up.

    However, as a business owner, I honored the gift since it was not the fault of the recipient they couldn’t get the money into my account. Many of us tried unsuccessfully , several times.

    Fast forward to now.
    Paypal places the funds immediately into the business account.

    So why does Paypal still withhold the funds from gifts purchased a long time ago? Paypal is withholding a large chunk of money and refuses to transfer these funds to my account.

    I requested Paypal send me all the information they have on these old funds. Name of gift buyer. Name of gift recipient. Date of purchase.
    No response.

    Did you find this review helpful? Yes   No

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