PayPal Eyes Growth in Asia with Smartphone Card Reader

Photo: fuseproject

Last Friday online payments provider PayPal launched its ‘PayPal Here’ service. It’s a global mobile solution that empowers small business operators to accept payment with their smartphone, thanks to a free mobile application and a card reader that connects via the headphone jack.

The add-on was developed by San Francisco-based fuseproject, who gave it an easily recognizable design and logo that customers could easily see and trust. The first countries to get the service are the US, Canada, Australia, and Hong Kong. You can check out the demo video of PayPal Here below.

The company noted the importance and potential of the Asian market in its announcement, with PayPal Asia Pacific’s senior vice president Rupert Keeley explaining:

PayPal is transforming the US$1.3 trillion SMB retail market [1] across the Asia Pacific region by enabling millions of small businesses to accept card and PayPal payments on a smartphone anytime, anywhere to grow their sales.

It’s a big opportunity for PayPal given the explosive growth of smartphones around the world, but particularly in Asia. As we noted last week, IDC forecasts that China will become the largest smartphone market in the world this year, displacing the US. Meanwhile India, which doesn’t yet account for 3 percent of the global smartphone market, is projected to grow to over 9 percent by 2016.

China in particular poses a special challenge for PayPal, since the Chinese government requires that “online payment services from non-finanical institutions [be] Chinese owned.” Nevertheless, PayPal has applied for a license to process electronic payments in China. It remains to be seen whether or not that application is successful. We’ve inquired with PayPal to find out more about its China plans and will update you if we learn more.

Meanwhile in China, Alipay has announced its plans to invest $79 million on its own cash on delivery system. The devices it plans to use aren’t quite as pretty as PayPal’s, but they will go into use in 2012.