Transaction Network Services Inc. and Blue Bamboo have entered into an agreement that enables independent sales organizations, acquirers and processors to sell a mobile-payment system, according to the companies.

The system includes smartphone software and hardware and payment-gateway services for mobile merchants in North America. Mobile merchants may include plumbers, contractors or home-based product sellers.

China-based Blue Bamboo is providing the hardware and software, and Reston, Va.-based Transaction Network Services is supplying gateway services.

The technology includes Blue Bamboo’s PocketPOS payment application that merchants download to their smartphones. The phone connects to the P25M magnetic-stripe reader and receipt printer via a Bluetooth or a serial or USB port connection.

Merchants may not use the application without the P25M hardware, says a Blue Bamboo spokesperson. "We tie the app to be used in tandem with our P25M for card-present transactions and paper receipts," he says.

The system works with more than 30 smartphones, including Blackberry phones. It is not compatible with Apple Inc.’s iPhone at this time.

The combination of payment-gateway and smartphone-payment products may help merchant-service providers penetrate the mobile-merchant market, which largely has been cash and check-based, notes Gerry Grealish, vice president of global product marketing at Transaction Network Services.

"This segment in the past just chose not to take cards because of the costs involved in having a wireless [point-of-sale] terminal. Or if they were taking cards, it was in a card-not-present environment," says Grealish, noting the mobile-merchant market is poised for growth in card acceptance

The system will be available in the middle of the second quarter, likely in mid-May, says Travis Lee, Transaction Network Services director of product marketing.

The cost for the smartphone hardware or software and to board a merchant to the system is less than $200, he says. Transaction Network Services also charges a monthly fee of less than $10 for monitoring and reporting of its Synapse gateway activity.

ISOs, processors and acquirers could earn income from reselling the system by marking up the monthly service fee, says Lee.

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