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Which is Right for Mobile Payments in East Africa, PayPal Here, Square, or Something Else?

October 4, 2014

Which is Right for Mobile Payments in East Africa, PayPal Here, Square, or Something Else?

October 4, 2014

In East Africa, there are currently two major players when it comes to mobile payments and smartphone processing solutions: PayPal Here and Square. But with these qualified contenders, which one is right for businesses in East Africa? We have explored the services and our findings may surprise you.

East African mobile payments, is PayPal Here for you?

PayPal Here is owned by internet superhero, Ebay. About a year ago, when identifying the economic opportunities in our region, they partnered with Equity Bank, seeking triple digit growth in East Africa. For African travel operators, who offer safaris and other services globally, PayPal provides easy access to nearly 140 million PayPal users worldwide.

PayPal Here offers free startup (including the reader, which plugs into a smartphone’s microphone) with iOs and Android device support, but requires a credit check and a background verification.

The fees offered by PayPal Here are inviting: a flat processing rate (as opposed to some others who charge credit card transaction fees of about 25¢) of 2.70% of swiped transactions and 3.50% plus 15¢ for manually entered transactions. Payment channels include all credit and signature debit cards, checks, PayPal account balances, and electronic invoices.

Funds are available immediately in a PayPal account and can be used for online purchases or withdrawn at an ATM using a PayPal debit card. Alternatively, users may opt to transfer funds to their bank accounts, which may take a couple of days.

PayPal offers many customer service options, including phone, email, and community support, as well as an online developer community.

Security with PayPal is top-notch, featuring encryption within the card reader, as well as at the data transmission layer.

Square: Mobile Payment Processing Solution in East Africa

Square, a San-Francisco-based brainchild of Twitter Co-Founder, Jack Dorsey, has been available since 2010 and was the front-runner in East Africa before PayPal Here came along.

Currently, Square offers benefits very similar to those of Paypal: free startup and multi-system support, readers and transmissions secured by encryption

One interesting feature that Square offers is a flat rate of $275 per month (for those who prefer, they also offer a 2.75% fee). An interesting option for businesses that do a lot of volume, where $275 becomes more economical that PayPal’s 2.70%. However, the flat rate has many restrictions, so be sure you read up before you Square up.

Another draw is that Square does not require a credit or background check for opening new accounts.

Unlike PayPal, Square offers no check processing option and no phone support.

mSwipe: The Best Solution for East African mobile payments

Perhaps less-known than its American counterparts, 3G Direct Pay’s mSwipe offers a fantastic POS solution that is right for African businesses, the new mobile payment app includes all you need to complete any payment transaction in an easy, fast and secure system. With 3G Direct Pay’s highest security measures it is the preferable solution in the region.


Eran Feinstein is the founder of 3G Direct Pay Limited, a global e-commerce and online payments solutions for the travel and related industries. With over 14 years of leading technology, sales, marketing and operation teams Eran is an authority in the East African e-commerce and payments arena. He’s also an avid marathon runner.

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