PayWare Mobile users that have Apple Inc.’s iPhones would be able to accept PayPal funds by bumping their phones with PayPal's users' iPhones under an agreement PayPal Inc. and VeriFone Systems Inc. announced Oct. 26.

The agreement also calls for VeriFone to use its PayWare Mobile card-encryption sleeve to expand PayPal payment acceptance via mobile phones and to integrate PayPal with online and point-of-sale environments. In addition, the terminal maker would promote PayPal and the bump funds-transfer function to its reseller channel, and the eBay Inc. unit would market PayWare Mobile to its user base.

An added benefit to VeriFone would be the enhanced use of its PayWare Connect payment-gateway service to provide merchants with integrated transaction reports for PayPal and traditional card payments. First Data Corp. and CardinalCommerce Corp. similarly announced Oct. 25 an agreement to enable merchants using First Data’s Compass card-not-present platform to receive consolidated PayPal and traditional transaction reporting (see story)

Paul Rasori, VeriFone senior vice president of marketing, says merchants are coming to expect such consolidated reporting. “It’s us pundits that view PayPal as an alternative payment; to consumers a payment is a payment,” he says. “It’s only logical for the merchant that’s buying a service that they get that consolidation.”

Gwenn Bézard, co-founder and research director at Aite Group in Boston, says consolidated reporting might sound trivial, but it is important, especially for emerging payment schemes.

“It’s going to make it easier for merchants to turn on alternative payments,” Bézard tells PaymentsSource. “It’s very positive for merchants and for anyone out there trying to put together new alternative payment [service], like a Bling Nation.”

Though Bling has yet to address the consolidated reporting issue, which Bézard says could impede its growth, VeriFone last month announced a deal with Bling Nation Ltd. in which the terminal maker plans to use its reseller network and payments gateway to extend point-of-sale acceptance to PayPal and to Bling’s rewards-based contactless tags (see story).

The Bling deal is separate from the PayPal agreement. “This just complements that,” Rasori says of this week’s PayPal announcement.

VeriFone expects PayPal to enable the bump funds-transfer function on its iPhone application around Jan. 1, Rasori says. What will take a bit longer is integrating PayPal with traditional card acceptance using VeriFone’s PayWare Mobile sleeve, he says, estimating that could occur during the first half of next year.

Through that arrangement, eBay’s online sellers that also sell at fairs and shows, for example, would have the option to accept traditional card payments or PayPal using their smart phones, Rasori says.

“PayPal’s goal is to give those eBay sellers the ability to accept alternative payments but also a credit card,” he says.

VeriFone decision to use PayWare Mobile to bring card and alternative-payment acceptance to smaller merchants is “not a negligible opportunity,” Bézard says. However, while VeriFone’s PayWare Mobile service is secure, the company may have difficulty capturing much scale with the product because it does not work with all phones, he says.

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