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PayPal readies launch of mobile payments system in Europe

Payment processor unveils new hardware that will read credit and debit cards that use the Chip and PIN system, which is more prevalent in Europe.

PayPal's new payment hardware for the Chip and PIN system of credit and debit cards in Europe.

PayPal unveiled new hardware today that will allow it to take its in-person mobile payment system to Europe, expanding the lead it has in the international market on rival Square.

PayPal Here, which launched last March in the U.S., Canada, Australia, and Hong Kong, will debut in the U.K. this summer for its first foray into the European market. The eBay-owned payments processor plans to eventually offer the service to other countries on the continent.

About the size of a smartphone, the payments processor's new gadget will accept credit and debit cards under the Chip and PIN system, which is more prevalent in European markets. Instead of swiping a card through a smartphone-attached dongle, merchants will use Bluetooth to pair the new reader with their iOS or Android smartphones to process customers' card and PIN information.

"Just like its original counterpart in the U.S. and other countries, it allows you to send invoices and receipts wherever you do business, as well as taking card and of course PayPal payments," Hill Ferguson, vice president of global product, said in a statement.

PayPal rival Square, which was founded in 2009 by Twitter co-founder Jack Dorsey, offers its mobile payments device in the U.S. and Canada.

PayPal did not reveal how much it intends to charge merchants for the device but did say they would be charged a "small" fee for each transaction.

"We'll announce actual pricing a little closer to the launch," Ferguson said. Currently, PayPal Here charges 2.7 percent to make a transaction, compared with the 2.75 percent that Square charges.

Check out this PayPal video for how transactions will occur: