Online payments firm Paypal (first encountered by most of us on eBay) has made a further step into the burgeoning online payments game in Europe by launching a budget chip-and-pin reader for the UK - presumably other markets will follow.

The gadget is similar in concept to the card reader/point-of-sale app combination it launched in the US a year ago (see - Paypal to offer smartphone cash register), just adapted to the UK chip and pin approach.

The idea to hook a low-cost reader to a smartphone and app to provide a fully-functioning payment method for small business persons acting as cafe owners, taxi drivers, market traders and the like. Obviously Paypal payments are enthusiastically supported but so too are the normal range of debit and credit cards.

The idea is to create an alternative to cash (when a customer doesn't have any, for instance) for small transactions, rather than muscle in on the existing electronic point of sale market, where surprisingly expensive terminals and systems rule the roost.

Paypal says the gadget will cost under £100 and the transaction fee is less than three per cent.