Online payments company PayPal will launch a credit card reader for mobile devices that will compete with Square, Intuit, and others at an event Thursday, according to GigaOM.

The conversation about mobile card readers is often dominated by Square, which now has three applications for phones and tablets and is now processing $4 billion in annual mobile payments. But eBay-owned PayPal, which has a huge hold on online payment processing, has been inching slowly toward mobile payments as well. At Mobile World Congress two weeks ago, PayPal announced the PayPal Carrier Payment Network, which aims to create standards in carrier payments. The company also demonstrated a new “digital wallet” at SXSW Interactive last week.

On Thursday, PayPal is expected to go further than before with a new dongle that can attach to various phones through a standard headphone jack. It will likely be shaped like a triangle, most likely so it won’t be confused with Square’s square-shaped dongle. One place we will likely see the new dongle in action will be Home Depot, which plans to offer PayPal payments at its nearly 2,000 stores in the U.S.

We will see on Thursday if the rumors hold true. Check back with us then to see if PayPal does indeed launch a new card reader and how it will change the mobile payments landscape.

PayPal booth logo: Liz Wise/Flickr

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