PayPal Here ushers in new age of mobile payment solutions.

In an endeavour to reach out further into the ‘real world’, PayPal, the virtual payment gateway has just announced an all new mode of mobile payment. PayPal Here could be the world’s first global mobile payments solution that’s designed to allow small businesses to accept almost any form of payment. Naturally, as it’s a mobile mode of payment, an app will be required to run the functionality and web tie-in with a corresponding device. PayPal Here consists of a free application and a fully encrypted thumb-sized card reader (Dongle) equipped with a standard 3.5mm jack that slips into the earphone socket of your iPhone. As of now, the system has been designed only for iPhone users with the promise that Android is next on the list.

The operation of PayPal Here will allow small businesses, service providers and casual sellers to send invoices or accept debit and credit cards, checks and PayPal payments using the product. Merchants can accept payments by swiping cards in the card reader, scanning cards and checks using their phone cameras, or manually entering card information into the app. They can also send an invoice and set payment terms directly from the app. And, of course, they can accept PayPal payments as well.

PayPal also released an update to their existing Mobile app for iOS that is designed to work with PayPal Here. PayPal users will be able to use the “Local” feature on the app to find nearby businesses that accept the PayPal Here system. Once the customer is ready to pay, they can notify the merchant by a quick tap on their mobile phone. Merchants can use PayPal Here to accept the payment by simply referencing the shopper’s name and picture.

“Helping small businesses grow and accept payments has been in PayPal’s DNA since its inception 14 years ago,” said PayPal’s Vice President of Mobile, David Marcus. “We’ve heard small businesses loud and clear. They don’t want to miss sales opportunities because they can’t accept the payment type that their customers want to use. They want quick access to their money, a reliable card reader, and one transparent, low fee to process these payments. I’m thrilled to launch PayPal Here because we’ve been able to bring all of these key features together into a product that’s so simple to use.”

PayPal Here’s payment structure works like this - merchants pay a simple flat rate of 2.7 percent for card swipes and PayPal payments. In addition, every PayPal Here merchant will receive a business debit card for quick access to cash and 1 percent cash-back on eligible purchases. If merchants use the debit card for purchases, their fees effectively come down to 1.7 percent.

PayPal Here comes with the company’s assurance of world-class fraud management capabilities and 24x7 live customer support. For now, the PayPal Here card reader and merchant app for iPhone are available exclusively to select merchants in the U.S, Canada, Australia and Hong Kong. It will be generally available in those countries next month. The Android version of the PayPal Here merchant app will also be available at that time. PayPal will announce the availability of PayPal Here in more countries soon. The updated PayPal app for iPhone is available in the iOS App Store globally, starting today.

The company plans to announce even more functionality to its merchants, later this year.