Square is finally getting some serious competition. PayPal, the company that dominates the global online payment market will begin selling a triangular credit card reader called PayPal Here to rival Square which has triumphed in micropayment. This tool will allow payment by credit card (and PayPal accounts) anywhere and anytime.
The difference is, while Square is still focusing on the US market while PayPal Here aims globally, including Asia Pacific, within the next 12-18 months.
According to The Jakarta Globe, PayPal SVP for Asia Pacific, Rupert Keeley said that they are pleased to be the first in Asia Pacific in the business and targeting the SME market. Australia and Hong Kong will be the first to try this product and it will later expand to other countries including China. PayPal already has a regional headquarters in Singapore.
How about Indonesia? Keeley mentioned that Indonesia, with 240 million people, is indeed attractive. But it seems that Keeley does not promise the availability of PayPal Here in the near future for Indonesia. This, I think, is quite reasonable considering that although PayPal accepts credit cards from Indonesia, its market scope is probably not as big as other countries in the region. Penetration of credit cards (as the base of PayPal account registration) in Indonesia is also still not so great.
According to central bank data, there are approximately 14 million credit cards in circulation in 2011. Growth is expected to decline in 2012 due to Bank Indonesia tightening terms of credit card ownerships. Applicant must have minimum revenue per month of Rp 3 million, and those with income below Rp 10 million per month may only have a maximum of two cards of different providers.
The potential usage of this tool is very large because, according to AllThingsD, Square has been serving transaction up to a total of US$ 4 billion every year. Fee deducted by PayPal Here is 2.7%, slightly lower than the 2.75% charged by Square. PayPal Here itself, for the time being, will be available for iPhone while the Android version will be developed beginning next month.
