by Miryam Muller in

PayPal, an eBay company, announced PayPal Here, a global mobile payments solution that allows small businesses to accept almost any form of payment. The company said that the new service includes a free app and fully encrypted thumb-sized triangular card reader, which turns any iPhone, and soon Android smartphone, into a mobile payment solution.

With PayPal Here, small businesses, service providers and casual sellers can send invoices or accept debit and credit cards, checks and PayPal using one simple product, the company said. PayPal users will be able to use the “Local” feature on the PayPal app to find nearby businesses that accept PayPal Here.

According to the company, PayPal Here gives merchants more choice than any mobile payment solution on the market today. Merchants can accept payments by swiping cards in the card reader, scanning cards and checks using their phone cameras, or manually entering card information into the app. They can also send an invoice and set payment terms directly from the app.

Square, started in 2009 by Twitter founder Jack Dorsey, is the mobile payments market leader. Square’s card reader, which is square, attaches to the top of iPhones and other mobile devices. It has been a hit among small merchants, such as cab drivers. Visa bought a stake in Square last year. Square charges 2.75% per swipe for Visa, MasterCard, Discover and AmEx. Their Free app and free Square Card Reader requires no merchant account, monthly fees or set-up costs. Manually-entered cards cost 3.5% + 15¢ per transaction.

Square has shipped over 800,000 card readers to merchants and is currently processing over $2 billion in payments annually. While currently focused on its U.S. growth, the company plans to offer Square in international markets in 2012.

Mobile phones equipped with Near Field Communications chips don’t require a card. You just bump your phone on the reader to make a payment.

Sprint supports competitor Google Wallet on two smartphones: Samsung’s Android-powered Nexus S and Galaxy Nexus, and plans at least 10 Google Wallet-enabled phones for 2012.