The difference between Mophie LLC’s payment card reader for Apple Inc.’s iPhone and similar products competitors have debuted is that Mophie’s Marketplace product will work with any merchant account, according to the Paw Paw, Mich.-based provider of technology accessory products such as smartphone batteries. Retailers can set up a merchant account through Mophie or use an existing account, and “this is the main difference between the Marketplace and competitors,” says a company spokesperson.
Mophie is “in the hardware business” and does not intend to earn additional funds from retailers “on the back end through transaction costs and merchant accounts like competing products,” says the spokesperson.
Square Inc., a company founded by Jack Dorsey, founder of the popular Twitter Inc. micro-blogging service, in December launched its own mobile-payment system that it says could enable merchants to process card transactions without a traditional merchant account. One way Square could work around the merchant-account requirement is if it becomes an aggregator of transactions, much like PayPal. Payment aggregators use their merchant accounts to facilitate transactions for sellers who do not have their own accounts.
“The problem Square is solving is different from what Mophie is solving,” says Todd Ablowitz, president of Double Diamond Group, a Centennial, Colo.-based consulting firm. “The Mophie device and app is very clearly and plainly making an iPhone a payment terminal. It will work through usual approaches,” he says.
The issue Square is attempting to solve with its device and mobile phones is similar to the issue PayPal solved online, which is enabling merchants to process transactions without merchant accounts, Ablowitz says.
VeriFone Holdings Inc. also in December launched a secure card reader and software called Payware Mobile for the iPhone. San Jose, Calif.-based VeriFone will require merchants to use its Payware Mobile payment gateway, which processes transactions through First Data Corp. However, VeriFone can configure a merchant’s account to work with other processors, says a spokesperson for the terminal maker. VeriFone will direct merchants without existing merchant accounts to a variety of payment processors, the terminal maker says.
Mophie claims to have achieved compliance with Payment Card Industry data-security standards for its device, though the spokesperson declined to say who certified the product, when the product will be available and what costs will be associated with it.
