Switching to wireless payment systems can reduce processing fees for some merchants, according to Hypercom Corp., which has started offering package deals that include both card terminals and network services.
Scott Goldthwaite, the Phoenix company's vice president of global solutions, said Friday that many merchants, such as couriers and taxi drivers, cannot be tethered to a point of sale terminal.
These people sometimes must resort to phoning in card details and paying higher card-not-present rates, and Hypercom says merchants are willing to overhaul their payment systems to bring their transaction fees down.
"Mobile continues to be a huge growth market, not just in the U.S.," Mr. Goldthwaite said.
Much of that growth will come from the smallest merchants, which had avoided mobile terminals because of their cost and complexity, he said.
Card companies categorize these merchants as Tier 4, the category for those with the lowest payment volume.
To help these small merchants to to wireless, Hypercom started offering its packaged Mobile POS Solution Suite last week.
The suite includes mobile card terminals, a gateway for routing payments, and a wireless network for transmitting payment data.
"Now we're providing the end-to-end pieces," Mr. Goldthwaite said. Hypercom can connect merchants to 200 carriers in 100 countries. "Wherever in the world we provide hardware, we can provide network connectivity as well."
Though the systems are designed for merchants that are often on the move, Mr. Goldthwaite said the technology also could appeal to merchants that are not. New merchants, or those just setting up card payment systems, might find it easier to use a wireless system than to set up a standard payment network, he said.
"The market for mobile wireless is going to continue to grow," Mr. Goldthwaite said.
Others also see opportunities for mobile card acceptance.
The Aircharge unit of the Quincy, Mass., processor Pipeline Data Inc. said last week it had received certification from Sprint Nextel Corp. to download its mobile-acquiring application onto several low-cost cellular handset models. Aircharge offers a variety of card readers that plug into laptop computers or transmit data using the Bluetooth wireless format.
Other vendors, such as Way Systems Inc. of Boston and VeriFone Holdings Inc.'s Lipman Electronic Engineering also offer dedicated wireless terminals.
Red Gillen, a senior banking analyst for Celent LLC, a Boston market research arm of Marsh & McLennan Cos., said that even though mobile payment terminals open card acceptance to new types of merchants, they are generally niche segments.
Hypercom's strategy "does bring card acceptance to new, nontraditional merchant segments when they're out in the field," Mr. Gillen said, but cards are already widely accepted among most merchants.
"I don't think there's this really huge unmet demand," he said. "Taxis are a new segment, but at the end of the day, it's not a huge segment."
Nevertheless, according to Mr. Gillen, there is merit to Mr. Goldthwaite's prediction that some merchants would consider switching to Hypercom's terminals to reduce the fees on transactions they are phoning in currently.
Calculating whether the savings can justify the investment cost is an easy task, Mr. Gillen said.
"If there's a cost benefit to those merchants to going from a card-not-present to a card-present pricing structure, then it should be self-evident," he said.
