Mobile Pay Outfit Shows Off System Made for Charities

Square seems to be wearing a big bull's-eye, given the number of firms that are horning in on its mobile swipe pay model.

Billhighway, a 13-year-old Troy, Mich., firm that offers accounting, cash management and payment processing to nonprofit firms, plans to join the fray with a mobile payment option that will be showcased this week in New York. The firm will outfit clients with a dongle, or a device that attaches to a smartphone, that can be used to receive payments from donors remotely.

The use case is similar to that of Square — staff working on behalf of a fundraising organization can reach people who are attending a live event and accept card donations on the spot. Billhighway's new app was built by a mix of processing technology developed internally by Billhighway and by Detroit Labs, a mobile application design and development firm that has designed apps for automakers.

The mobile devices will collect payments and route them to Billhighway's processing engine, which is delivered to clients via the web, allowing for minimal upfront tech development or cost. Billhighway makes money by collecting a fee in exchange for processing the transaction. It didn't disclose the size of the fee (rival Square collects less than 3% per transaction).

"We're looking at how we can enable organizations to raise money anywhere," says Vincent Thomas, CEO and founder of Billhighway.

Thomas says the app works three ways. Donors can swipe their payment cards through the readers, use the camera on the smartphone to snap a picture of the payment card, or type the information from the card into the mobile device.

The firm currently has 27 different pilots in progress, and plans to partner with Easter Seals for that charity's Walk-a-Thon program. Billhighway's mix of clients includes mostly nonprofits, higher education institutions, youth organizations, faith-based charities, and business associations.

In offering mobile phones as a payment acceptance device, Billhighway in a very crowded field, but also a very hot one. Other firms include Square, Pay Anywhere, and eBay subsidiary PayPal (EBAY). Fiserv (FISV) also this week launched a solution to be offered directly though financial institutions.

Billhighway is attempting to separate itself from the pack by focusing on non-profits. Most of the other firms focus on small contractors — the plumber or shop owner who uses their smartphone to collect payments from consumers. Square has also drawn buzz from being used by the Obama and Romney campaigns to collect donations from constituents at political rallies.

"We find a lot of the payments technology out there today is built for the profit world," Thomas says.

While Square and Pay Anywhere have both positioned their products as amenable to nonprofit fundraising, Billhighway hopes its singular focus and history in the nonprofit sector would give it a leg up on other firms, since the firm contends its processing technology doesn't have to be reconfigured for charitable giving. Thomas did not address the possibility of offering Billhighway's mobile collections app through financial institutions.

Square didn't return requests for comment by Wednesday.

PayAnywhere CIO Tracy Metzger says the firm's app can be configured to accept cash and credit card donations and keep track of demographic information of the donor by using the customer field manager of the application so non-profits can keep track of who has donated and how they have donated.

Metzger says nonprofits sign up for a free PayAnywhere merchant account to get started. "For larger, more customized implementations, nonprofits work with PayAnywhere to leverage our application programming interface to add the ability to accept and process payments on the go, via a mobile device, into the apps or websites that the non-profit uses in the field to collect donations."