A Canadian ISO is offering its merchants a proprietary mobile-payment acceptance device that other Canadian ISOs also could sell.
Toronto-based Collective Point of Sale Solutions Ltd., an ISO with more than 10,000 merchants, began distributing the Virtual Merchant Mobile about six weeks ago and announced it to the public last week, says Michael Back, the company’s president and CEO.
“We’re now making merchant processing affordable for merchants who had to think twice before,” Back says. Because of the low cost of the device relative to countertop terminals, home-based businesses and other small retailers that could not afford to take card payments previously may do so now, he says.
Collective Point of Sale hired a software developer to create the device, which measures roughly the size of a credit card.
The device accepts credit cards but not PIN-debit cards, and it accepts cards with magnetic stripes but does not work with EMV smart cards, Back says.
“This is an early version of the device,” he notes.
Retailers had placed about 100 of the devices as of Dec. 19, he says.
Merchants pay $99 for the card reader, and then pay the same fees that they normally would negotiate for regular card transactions, says Back. They would pay nothing in addition to those regular fees, he says.
That contrasts with the Square Inc. business plan that calls for furnishing the Square mobile reader for free and charging merchants 2.75% for a card-present swipe, the San Francisco-based company’s website says.
The device also differs from Square because Square Inc. becomes the merchant of record for its transactions, while users of the Collective Point of Sale reader maintain their own merchant accounts, Back says.
Collective Point of Sale is making its device available to merchants through its direct-sales staff and through its sub-ISOs and agents. “We sell through as many sales channels as we can,” Back says.
ISOs not affiliated with the Collective Point of Sale also may offer the device to merchants, which could become a step toward associating with the company in other ways, he says.
The device works only in Canada, but Back hopes to conclude settlement agreements in the United States that could give rise to offering it there.
