I have raised an issue with PayPal Support, but just wondering if anyone else out there has had a similar problem and resolved it. Up to a couple of days ago, my PayPal Here card reader and App were working fine on my iPhone 5c, and the iPhone had been upgraded from iOS 9.2.1 to iOS 9.3, and on to iOS 9.3.1. PayPal Here had worked fine through all versions. Then I damaged the iPhone. Luckily, I have another iPhone 5c that I could use, so I got the iOS up to date and performed a full restore on to that iPhone, and all is well except for some kind of connection issue with the Card Reader. The Bluetooth connection seems to work ok. The Reader shows up in the list, and I can connect to it ok. I can make the iPhone forget the device and re-pair ok as well. No obvious problems at this stage. Opening the Here App, and logging-in is ok too, and the grey window pops up to say that the Reader is connecting, but it doesn't; the grey window remains on display until, eventually, the Reader disconnects itself. I've tried a factory reset on the reader, tried various sequences of startting the app first, starting the Reader first, deleting/re-installing the Here app... nothing changes. I have dug out an old iPad 2 running iOS 9.1, and got the app and reader connected to it successfully, so I know that there's no issue with the Reader, and that was following the standard set-up guide from PayPal. I'm also certain that the substitute iPhone is working ok - other bluetooth devices are connecting and working ok.
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