As one of the first resellers of VeriFone Holdings Inc.’s PayWare Mobile service, Merchant 360 Inc. says some mobile merchants like that the service includes a card reader that enables them to get card-present transaction rates.
“Everybody loves to save money,” Steve McRae, CEO of the San Francisco-based merchant-services company, tells PaymentsSource. “That’s the No. 1 reason why merchants even look at this for a solution.”
PayWare Mobile operates on Apple Inc.’s iPhone using software and a card reader. VeriFone says it plans eventually to make similar versions available for other smartphones.
Last week, during the company’s first-quarter earnings conference call with analysts, the San Jose, Calif.-based point-of-sale device maker said 70 ISOs are selling the service, which generates monthly online payment gateway and per-transaction fees. VeriFone would not release the ISOs’ identities, citing competitive issues.
The reader is free for many merchants if they sign a long-term contract (see story).
VeriFone’s suggested pricing plan is a $15 monthly gateway fee and a one-time $49 sign-up fee for merchants with existing accounts. Merchants also pay VeriFone 17 cents per PayWare Mobile transaction. Resellers, including acquirers, set their own rates, VeriFone says.
McRae says he chose to resell PayWare because it is getting so much attention now, especially as VeriFone advertises the product. However, many of the merchant leads from inquiries to his company are weak, he says.
“The problem is 80% of them don’t qualify for actual merchant accounts,” McRae says. That is usually because the business is a side job for the merchant, such as a catering business that operates intermittently, he says.
Another prospective Merchant 360 merchant, a plumbing business, has four plumbers that each have iPhones. But if each only has three to four transactions per month, PayWare may not be the most affordable option, McRae says.
“If they’re doing a couple of [transactions] a day, it absolutely makes sense,” he says.
