PayPal Reportedly Planning Mobile Payments Challenge to Square

On Wednesday, the rumor mill cranked out a most curious chunk of speculation. According to those in the know, PayPal is working on a new mobile payment device to challenge the likes of Square and Intuit – makers of the two most dominant dongles in the mobile payments space today.

Sources familiar with PayPal’s plans tell Gigaom that PayPal’s dongle will likely be triangle shaped and will “allow small business owners to process credit card swipes from a smartphone, similar to Square, Intuit’s GoPayment and Verifone’s PAYware.”

With more than 100 million active users across 190 countries, PayPal’s reach is vast and diverse. A dongle unique to the platform could be an instant success capable of rivaling – or breezing past – other players in the space almost immediately.

So… is this a rumor or a pending reality? We’ll find out Thursday at the company’s San Francisco event.