This week, VeriFone Systems Inc. turned its PayWare Mobile reader into the payment-acceptance equivalent of a multipurpose Swiss Army knife, a step needed to introduce the device to a global audience, according to the San Jose, Calif., payment terminal maker.
Meanwhile, Intuit Inc. said its GoPayment reader has proven so popular among small merchants that it is extending its promotional pricing indefinitely. A pricing option that waives monthly fees was initially set to expire in mid-February.
And late last week, Square Inc., the company headed by Twitter Inc. co-founder Jack Dorsey, began pitching its ultrasmall card reader on massive billboards in New York's Times Square.
"The trend in mobile acceptance is clearly moving toward a low-cost, low-barrier" offering, said Todd Ablowitz, the president of Double Diamond Group LLC in Centennial, Colo.
VeriFone's new device features a Payment Card Industry PIN-transaction security-certified PIN pad and both a contactless and magnetic stripe card reader. The device is to be available in Canada and the United Kingdom by the end of March. VeriFone also plans to introduce PayWare Mobile in other European countries, Latin America and Asia during this year.
"Our thinking has been that we have to be ready for all forms of payment, whatever comes next," Tony Saunders, VeriFone's U.K. marketing director, said in an interview. "We have to be sure our products are positioned to support any transaction capability."
Nick Collin, a director at Collin Consulting Ltd. in London, said the trend to turn mobile phones into card-acceptance devices is more promising than turning handsets into payment vehicles.
PayWare Mobile can pick up some significant traction in a U.K. that is moving away from checks, Collin said. Some payments insiders in the region said homebound citizens would have trouble paying for goods and services if they were unable to use checks, Collin said.
"Now, if the plumber comes to make a repair and has one of these devices," a card payment is doable, he said.
Besides its iPhone core, PayWare Mobile features the same technology as VeriFone's point of sale terminals. The final form factor, however, was difficult to accomplish, Saunders said.
"Anything that interacts with an Apple device is always a challenge," he said. "Not only does the device have to be compatible with payment certifications, [but] you also have to meet Apple certifications as well."
The PIN-pad device is available only for the iPhone, but one is being developed for other devices, a VeriFone representative said.
VeriFone is seeking ways to distribute PayWare Mobile through multiple channels. It continues to discuss partnerships with five merchant acquirers in the U.K. and with wireless operators that support Apple's iPhone. VeriFone also will pursue merchants through its own relationships, Saunders said.
"We're being very tactical with [distribution] and not taking a shotgun approach," Saunders said.
VeriFone is still completing agreements with acquirers and other distribution channels, so PayWare Mobile's pricing structure has not been determined, Saunders said.
Merchants or their processors will pay a hardware cost and a monthly gateway service fee, Saunders said. Acquirers determine the transaction fees.
In the U.S. VeriFone uses a two-tier rate scheme for PayWare. Merchants with fewer than 1,500 monthly transactions pay a suggested retail rate of 2.75% of the sale, plus 15 cents, but no monthly fee. They pay $99 for the accompanying card reader, which continues to sell for $149.95 on Apple Inc.'s website.
