We previously reported on rumors that PayPal was getting ready to launch a Square competitor. Now, the rumors have become reality, as today, PayPal unveiled PayPal Here.

Like Square, it comes with a card reader you plug into your smartphone and a free app. Merchants can still accept payments without the reader, however, as the app will also scan cards. Actually, beyond the major credit cards, PayPal Here will also accept payments via PayPal (obviously), checks and invoices.

The rate is 2.7% per transaction. Square’s is 2.75% per swipe for credit cards.

“PayPal Here is the world’s first global mobile payment solution that allows small businesses to accept almost any form of payment,” says PayPal VP of Mobile David Marcus. “It’s designed to help those merchants make more sales and grow their business with confidence. And it gives them choices. They can accept payments by swiping cards with a fully encrypted thumb-sized card reader, or use a phone camera to scan and process cards and checks. It also allows them to invoice directly from the mobile app and, of course, accept PayPal in a brand new way.”

“So, you’re asking, how is this different from other small business mobile payment solutions?” he continues. “The key differentiator is that it comes from PayPal, a trusted brand in the online payments industry with more than 100 million customers around the globe and years of proven payment innovation, driving growth for millions of businesses globally. PayPal Here comes with our world-class fraud management capabilities, and our 24×7 live customer support. In addition to accepting more payment methods, PayPal Here offers a simple flat rate of 2.7% for card swipes and PayPal payments. Merchants are also given a business debit card for quick access to their funds and 1% cash back on eligible purchases – which means if you use the debit card, your fees are actually just 1.7%!”

Earlier this month, Square itself launched a new iPad app – Square Register, promising “everything” you need to run a business. As Square gains popularity among businesses, PayPal will have its work cut out for it on the competition front.

For PayPal, it’s been a big week. The company also unveiled a new digital wallet product, which it deemed “the future of PayPal”. Here’s a closer look at that:

PayPal Here will be available for iPhone and Android. It’s not actually available yet, but PayPal will let you know when it is if you give them your name, email address and phone number.