Called PayPal Here, the service is similar to existing mobile payments services such as Square. Customers will be able to pay using credit cards, their PayPal accounts or checks in the U.S. But they don't need a PayPal account to do so.
PayPal said Thursday that the service will be available for Android devices later. The service doesn't work with Apple's iPad, whereas Square does.
Businesses will be able to accept payments without the card reader, though this will be more time-consuming. Merchants will be able to manually type in or scan credit card information, or email customers an invoice that they can pay later.
The service is already available for some merchants in the U.S., Canada, Hong Kong and Australia. Other businesses can sign up for PayPal Here on the company's website and get notified when it becomes available, the company said.
PayPal, which is owned by eBay Inc., will take a 2.7 per cent cut for each credit card and PayPal transaction. Square takes a 2.75 per cent commission.