Now that Square’s off and running in the credit card-swiping-from-mobile-phone market, PayPal is realizing that they should probably get in on the action. According to sources that spoke to GigaOM, PayPal will announce on Thursday that it’s launching a service that will allow small businesses to use smartphones as a device to process credit cards.

The new service will include a smartphone payment dongle that “might be shaped like a triangle” and will stake a claim directly in the turf of Square, as well as other existing services like Intuit and Verifone. The decision to mobilize customer’s payment options coincides with PayPal’s recent deployment of its services to 2,000 Home Depots. While that model is tailored for box stores and larger businesses, PayPal’s launch of a dongle that would turn any smartphone into a point of sale is likely intended to invite small businesses and the self-employed to begin utilizing PayPal as a payment method.

A PayPal spokesperson declined to confirm the info from GigaOM’s source, but then seemingly affirmed all speculation by stating, “We’re unveiling what we believe will be the future of commerce for small businesses.”

Society certainly doesn’t have any shortage of people looking to spend money so there’s likely enough girth to the market for multiple smartphone-turned-credit card machines to coexist. Stay tuned till Thursday to find out if a dongle is in fact what PayPal is launching in order to ferry us into the “future of commerce.”