PayPal Here to launch in Singapore later this year; competes head-on with Swiff

All gloves are off in the battle for mobile payment dominance in Asia.

In one corner is mighty PayPal, which will launch its own mobile credit card reader called PayPal Here in Singapore later this year. It is already available in Hong Kong, Australia, US, and Canada.

In the other corner is underdog Swiff, a Singapore-based startup that launched its own mobile payment service last week.

Both companies’ service include credit-card swiping devices that can be attached to a mobile phone or tablet to allow merchants to collect payments without the need for costly POS machines.

The idea originated from Square, a US-company founded by Twitter creator Jack Dorsey.

PayPal’s plans to expand its service to Singapore was made known shortly after Swiff held their launch last Thursday.

The company has touted PayPal Here as different from Swiff in one fundamental way.

While Swiff requires merchants to work with their bank and even third-party mobile POS providers to implement their system into business operations, PayPal Here needs only a smartphone, a free-of-charge card reader, and the free mobile app.

In other words, freelancers and individuals can start using PayPal Here to conduct transactions right away, while Swiff is only available to business establishments like restaurants and shops at the moment.

Swiff has promised, however, that peer-to-peer transactions are coming soon, so PayPal Here’s advantage might already be moot by the time it arrives in Singapore.

That’s not the only advantage PayPal has though. As it is an established brand name with a large presence globally, it has the benefit of trust and scale, something that Swiff will have to try very hard to build.

Also, Swiff’s decision to work through the merchant banks to sell their products could be a double-edged sword. While this approach has the potential to scale quicker than approaching merchants individually, and it mitigates the trust disadvantage, we don’t know how committed banks are to promoting Swiff.

According to Boon Teck Tan, business and operations manager at Kido Tech, a distributor of mobile POS systems, Swiff’s transaction rates, charged through its partner HSBC Bank, are in fact costlier than traditional POS systems for high volume merchants.