Eros Peterson from Toronto pointed out to me last week that Squareup.com that I blogged out back in Nov of 2010 doesn't work in Canada. He's located an alternative that works in CA called Helcim.com. The down-side of Hilcim.com is it's $24/month and you have to pay $75 for the smartPhone card reader.
Shortly after I heard from Eros I noticed that PayPal, which I use extensively for credit card processing in selling eBooks is, as of yesterday (March 15, 2012) in the process of rolling out a service very similar to Squareup.com. That is, you get card reader for free, free App for iPhone and Android, you are charged only 2.7% on each transaction, no monthly fee, money is in your account immediately and the PayPal service is world wide. There is a wait list that you can sign up for here. The service is called PayPal Here. I'm on the wait list so I've not been able to try it out yet. Hopefully this worldwide rollout won't take too long.
Based on the WorldWide link at the bottom of the PayPal Here page my understanding is that PayPal Here will work worldwide as PayPal now does. Better checkout your country to verify. There are a few countries that PayPal doesn't serve. The only one I've run into so far is Nigeria. When there is a currency conversion there is an extra 3.9% conversion cost.
I'd be interested to know people's experience with this in other countries. Does this work in your country, is there another alternative that does the same thing and works better in your country? This kind if ability to process credit cards is really useful for small businesses. It means you can easily collect from your client right at the time you are providing the service and eliminate the billing and collection hassel.
Update 3/18/2012: Harry McCracken over at techland.time.com says, "internationally, though it’ll only be available to “select merchants” in the U.S., Canada, Australia and Hong Kong at first".