It’s plastic: presumably these were prototypes we were looking at, but we’re not impressed with the build quality at all. There are big seams where the parts come together and the plastic itself has a finish that lacks the subtle elegance of the Square reader.

When did being a big, global, established product company come to mean that it was okay to produce poor quality products?

Big used to mean better. Companies were able to deliver bigger R&D, better QA, better product development with a reduction in the variability of production and an overall increase in quality of their consumer products. Scale helped. It helped organisations leverage their resources to gain vast improvements in quality and bring significant improvements in design and research of products.

Now for most large product organisations, it means reducing costs to a point where quality slips dramatically, not spending money on R&D and raising the import of cost far over design. Whatever the reason (cost pressure, shareholder pressure, it’s what our competitors are doing), it’s what the majority of the market is doing.

PayPal recently released PayPal Here. It’s their attempt at competing with Square, specifically the Square Reader.

By no means is PayPal Here the only competitor to Square. Everbrite has also launched their own card reader which integrates with their At the Door iPad App. And let’s not forget that all these companies are competing against the big, giant elephants in the corner: the existing banking and credit card companies.

So we’ve established that PayPal Here is a new product with a broad range of competition. It’s from a large, established company, so it should have greater resources to bring to bear on the development of this device to really nail it. But that’s not what happened at all.

Reviews of the device have indicated its hacky, poor build quality - it’s a rush job. Admittedly, even if it’s a prototype, it still needs to be customer ready. And this wasn’t at all. Square is winning in the portable payment space because they have a polished, quality product, not because they were first to market. As a later player to the market, you absolutely need a well refined and tested product to compete. It has to shine. PayPal will lose the space (a space that they helped established with their original disruptive product shaking up the payments sector) by bringing out a rushed, hacky product that turns away customers.

The lesson of Apple is that spending on design and quality wins. They have used their scale and size (in their supply chain, design, retailing, all aspects of their business) to their advantage to ensure the highest possible quality and to build products that no-one else can, not to build the cheapest products (cost and quality-wise) that anyone can. That’s how they became the largest, most successful product company in the world right now. And it’s probably how they’ll stay that way.