Square Taking on PayPal in Mobile Gift Cards

While it isn’t yet clear whether Square or PayPal will win the war for mobile, the battle continues to be a win-win for mobile consumers everywhere.

In a move that comes as anything but a gift to PayPal, Square on Monday took yet another swipe at PayPal’s diverse market dominance by giving small merchants the ability to sell gift cards to mobile shoppers.

A new version of the Square Wallet app has been rolled out and, not surprisingly, it works with Apple’s iPhone and iPad as well as devices running Google’s software.

According to Bloomberg, the upgrade now makes it possible for users to buy and redeem gift certificates in amounts spanning $10 to $1,000.

Gift cards are Square’s latest effort to convince customers to choose its fledgling service over PayPal Here, a mobile card reader that also works with smartphones and tablets. Square’s gift certificates may help the company gain share in the market for mobile payments, which Juniper Research estimates may top $170 billion in transactions by 2015, up from about $60 billion last year.

“These are mostly empowering merchants that haven’t had gift card programs,” Keith Rabois, Square’s chief operating officer, tells Bloomberg.

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