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This article appears in the Feb. 5, 2009, edition of ISO&Agent Weekly.
A California entrepreneur has developed a card-acceptance application for Apple Inc.'s iPhone, underscoring the rapid emergence of smartphones as mobile financial tools. Randy Palermo, a Tustin, Calif.-based software developer who does business as Rapadev LLC, says he has submitted his software application, called ProcessAway, to Apple for review. The software only is available via the Apple iTunes store.
After the review process the application could be offered through the Cupertino, Calif.-based company's App Store.
"This is something I decided to throw together, because I could see there's a big need for it," says Palermo, who has no background in payments or banking. He says he relied on a developer kit provided by Authorize.Net, an online payment system for small merchants operated by CyberSource Corp., a Mountain View, Calif.-based payment processor.
The ProcessAway software will cost $19.99. A free version, called ProcessLite, will offer the same features and functions but limit charges to a maximum of $5 per transaction, Palermo says.
Palermo says other Authorize.Net resellers have discussed offering a $20 iTunes gift card to cover the software cost.
Consumers will use the software to accept card payments at swap meets, street fairs and antique shows, and it could also be used, for example, by mobile auto detailing experts, on-site consultants or handymen, says Palermo.
Using The Software
To accept payments through their phones, merchants must manually input customers' card numbers, expiration dates and the transaction amounts. "If there are any entry errors, the system won't authorize it," Palermo says.
Already, one ISO, Capital Merchant Solutions Inc., based in Bloomington, Ill., is reselling the app on its Web site.
The iPhone has serial communications capability, but cables to connect it to external devices are currently not available, says Palermo. Apple expects the phones eventually will be able to work with peripheral devices, such as a plug-in card reader, he speculates.
Authorize.Net treats iPhone transactions like other card-not-present online sales, so there is no limit on transaction amounts, Palermo says. The advantage of card-reader support is that "with a card reader you get better rates."
An updated version of his software is expected soon that would enable iPhones to store transaction data, though not card data, so merchants would not need to re-enter data for returning customers or recurring product sales, says Palermo.
Any data typed into the application is encrypted before it is transmitted, regardless of if the iPhone uses its wireless telephone or broadband connection, he says.
Evolution Of Mobile Payments
The emergence of independent developers of such applications could accelerate the evolution of mobile payments.
Inner Fence LLC, a Seattle-based software developer, has a credit card terminal application in the iTunes store available for $50.
Visa Inc. stated last month when it introduced its Visa Mobile application for Google Inc.'s Android operating system that mobile card acceptance was on Visa's road map, though other mobile commerce tools would be available first.
Likewise, eBay Inc.'s PayPal unit has renewed its interest in mobile payments, as smartphones such as the iPhone and the Android phone operating system emphasize the data-processing capabilities of mobile handsets.
Additional reporting by Kevin Woodward.
