The news: PayPal rolled out the PayPal Zettle Terminal in the US after an EU launch last year, per a press release. PayPal already offers Zettle’s card reader solution in the US.

Terminal is an all-in-one point-of-sale (POS) solution for small and medium-sized businesses (SMBs).

• It lets SMBs track stock levels and manage sales, reporting, and payments all in one place.
• The device’s mobility––from its handheld design to its ability to accept payments via a cellular connection––sets it up to attract small and micro-businesses, especially those like vendors at a farmers market without permanent storefronts.

The opportunity: Amid a fintech downturn and other market turmoil, PayPal is focused on recentering the company back to its core business. Its three-pronged growth strategy targets its digital wallet, Braintree, and checkout, which bringing Terminal to the US can support.

PayPal has yet to fully penetrate in-store checkout. Despite its in-store transaction value topping $20 billion in 2020, this was a mere 2.1% of its total volume. And while digitization has been key to PayPal’s success, in-store commerce will still compose 85% of total US retail sales in 2022, making it a key vehicle for PayPal’s growth. Launching Terminal in the US will help it capture more of these in-store sales and get the extra fees associated with card transactions.

Competitive standing: PayPal is entering a highly competitive POS market. It will have to contend with giants like Block’s Square and Fiserv’s Clover. That will make it harder for PayPal to capture market share, complicating Zettle’s success.

But Terminal’s place in the broader PayPal ecosystem sets it apart from competitors.

• PayPal is working toward a unified commerce experience for merchants and consumers, which requires all transactions staying in-house.
• Zettle merchants will be able to bundle the Terminal with PayPal’s other merchant solutions, bringing it closer to being a one-stop shop for small businesses.
• Merchants will also soon be able to access their Terminal sales through their PayPal accounts, with funds settling near instantly. That will tie merchants closer to PayPal’s brand and provide more cross-sell opportunities for the payments giant.

This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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