eBay's Pay Pal to Unveil Mobile Payment Tool ‘Dongle’

eBay-owned e-commerce company, PayPal is expected to launch a mobile payment tool called "dongle" to rival similar technologies from competitors including Square and Intuit.

The dongle — said to be shaped like a triangle — will enable users to process credit and debit card transactions via mobile device, enabling PayPal to extend its services to food trucks, craft fair vendors and other startups without a fixed location.

Square charges a 2.75% commission for every credit card swipe, and PayPal might possibly try and undercut this price point to make inroads into this segment. Given that PayPal processed around $119 billion in payment volume for 2011, the company may be able to afford such reduction, although it is bound to bring down its overall take rates per transaction in the long run.

The PayPal dongle will face stiff competition, most notably from Square, the mobile payment startup led by Twitter founder Jack Dorsey. More than a million merchants nationwide now accept credit and debit cards via Square, and the company now processes more than $4 billion in payments each year. The Square reader is sold across more than 9,000 Apple, Best Buy, RadioShack, Target and Walmart retail locations nationwide.