For small businesses and sole proprietors that don’t currently have payment solutions, PayPal’s (News - Alert) new smartphone-powered triangular card reader may deliver the perfect answer.

PayPal Here will allow customers to pay via credit card, check (in the U.S. only) or PayPal account through the business owner’s smartphone. To pay via credit card or check, customers will not need to establish a PayPal account. The program is an extension of eBay’s (News - Alert) mission to push into offline commerce, along with its recent unveiling of a plan that allows people to use their PayPal accounts to pay for items at The Home Depot.

Merchants use the PayPal Here app to ring up purchases on their mobile phone. Then, they either swipe a credit card through the free card reader, access the customer’s checking account or access the customer’s PayPal account. The customer can choose to tip the business and then inputs his or her signature directly onto the smartphone screen.

The funds are deposited into the business owner’s PayPal account and are immediately available for transfer. Customers choose where they want their receipt to be sent, whether to their email account or to their mobile phone.

If businesses don’t choose to obtain the card reader, then they can still accept payments via PayPal. They can either type in the card information and then use the camera on their smartphone to scan the card or they can put together a PayPal invoice to send to the customer, which the customer then pays later.

For each credit card or PayPal transaction, PayPal will collect 2.7 percent of the transaction as their service fee. Accepting checks will cost nothing, while business owners who manually type in and scan credit card information will pay 3.5 percent plus 15 cents per transaction.

PayPal Here is available for iPhone (News - Alert). While there is no dedicated iPad app, the iPhone app technically will work on the iPad. The app is currently under development for Android devices.

eBay CEO John Donahoe told Bloomberg (News - Alert) Businessweek that PayPal wants merchants to have the tools that they need to accept customer payments in as many ways as possible.

“What consumers are looking for,” said Donahoe, “is the ability to shop anytime, anywhere.”