PayPal released its first credit card reader — PayPal Here, designed to let merchants take payments on mobile devices — in 2012. Now, almost three years later, PayPal is updating its PayPal Here hardware to work with EMV "Chip and PIN" cards in the US, and adding support for Windows 8.1 devices such as Surface tablets and Lumia phones.

This marks the first time PayPal Here will be available on Windows, and Microsoft is taking advantage of the move to market its Surface Pro 3 as a complete point-of-sale device that sellers can use to manage their business, track their finances, and actually take payments. The company says merchants will be able to buy the complete POS system — with Surface tablet, PayPal Here reader, and a new set of fixed and portable enclosures to house both — later this year.

The new PayPal Here reader will add support for EMV credit and debit cards as the technology, which relies on a PIN for authentication rather than a signature, rolls out across the US. PayPal says that the new reader, due later this year, will allow contactless transactions over Bluetooth and will support "any chip card, magnetic stripe card, or contactless payment form, including mobile wallets."

PayPal's move to support EMV cards in its reader comes a few months after competitor Square announced its own Chip and PIN card reader. Square's EMV reader is now available for pre-order, while PayPal says its own version will begin rolling out to small businesses in the US later this year. But PayPal's using the opportunity to get one up on potentially struggling competition in the increasingly crowded card reader market — the company is officially making its PayPal Here SDK available to developers after a pilot program last year. In the right hands, developers could fold the payment functionality into custom software they build for businesses, making it a more standard way to pay in the future.