PayPal to Announce Square Competitor Thursday [REPORT]

PayPal will take on Square with a mobile payment dongle that will let business owners process credit card payments via their smartphones, according to a news report.

GigaOm claims that PayPal will announce the solution on Thursday. The report, which cites “sources we’ve talked to who are familiar with PayPal’s plans,” says the dongle will be shaped like a triangle and vie not just with Square, but with Intuit’s GoPayment and Verifone’s PAYware as well.Reps from PayPal could not be reached for comment on the report.Such a move is plausible in light of PayPal’s recent forays into offline payment systems. In November, the eBay-owned company announced PayPal Wallet, a card that lets consumers pay from multiple accounts, store and use gift cards, access special offers and store receipts. That product is expected to roll out some time this year. PayPal has also rolled out a program that lets shoppers use its service in more than 2,000 Home Depot stores. The company plans to enlist more than 20 retailers to that program by year’s end.

Meanwhile, Square, which is run by Twitter co-founder Jack Dorsey, has demonstrated how fertile the market is for small business-based mobile payment solutions. The company is now processing $4 billion worth of payments and added its 1 millionth small business customer in December. In addition, Square is colonizing new areas of commerce, including New York taxis. The company also introduced an iPad app this month that aims to supplant traditional cash registers.