Joining a growing list of similar companies trying to move more cash payments to cards, Payment Data Systems Inc. will launch iRemotePay next month to meet growing merchant demand for a payment-acceptance option to use away from their actual stores or if they do business in outdoor markets.
The iRemotePay application will be available for Apple Inc.’s iPhone, iPad and iTouch devices in October, and an application for phones that use Google Inc.’s Android operating system will follow if merchants widely accept the iPhone version’s launch, the San Antonio-based electronic payments company announced Aug. 31.
“We were getting a lot of inquiries from our clients who said they needed remote merchant processing because they had instances in which they wanted to be outside with their customers,” Michael Long, Payment Data Systems CEO, tells PaymentsSource.
Payment Data Systems designed the iRemotePay application, and IDTech Corp. of Cypress, Calif., will provide the card reader that attaches through the phone or iPad power jack.
The company will target merchants at flea markets, church functions, festivals or concerts for iRemotePay, Long says. But merchants in need of a mobile-payment option in a busy store or those who sell away from stores or offices, such as plumbers, taxi drivers and repairmen, also would benefit from iRemotePay, he adds.
“Wireless point-of-sale terminals are not really flexible enough,” Long contends, referring to devices designed specifically to accept card payments remotely using Wi-Fi connectivity. If the merchant has to move around a market in any fashion, he might encounter trouble getting a Wi-Fi connection with a wireless terminal, whereas iRemotePay relies solely on the cellular connection, Long says.
Because the iPhone is Wi-Fi enabled, Long says the merchant will have the option to use Wi-Fi connectivity with iRemotePay if the cellular signal is weak.
IRemotePay will be free to customers and to others who may not even use Payment Data Systems as their merchant processor. “As long as they are using Payment Data Systems as [their] payments gateway, we will provide iRemotePay free,” Long says. “This is an untapped market and something we definitely want to do for our customers.”
Long says iRemotePay will encrypt transactions in compliance with the Payment Card Industry Data Security Standard.
Merchants may use the system to accept all credit and debit cards; they also may accept checks by manually keying in the bank routing numbers, he adds.
As the number of mobile-payment companies grows, the next challenge will be to ensure the sale of devices, or their effect on increased sales, results in a profit, one industry analyst contends.
“How to make a profit–that’s the next shoe to drop in all of this for companies developing mobile-pay options,” Paul Tomasofsky, president of Two Sparrows Consulting of Montvale, N.J., tells PaymentsSource.
“If they are going to make the device available for free, will there be enough transactions processed to pay for the cost of support?” Tomasofsky asks.
Payment Data Systems and others like it address a merchant need, especially if the merchant tends to operate on a cash-only basis and would increase sales with a credit card reader, Tomasofsky believes. But it will take marketing, not technology, to stand out among competitors, he adds.
“If you already have a device like this, it would take a lot to cause the merchant to go someplace else for a different one,” Tomasofsky says. “It really becomes a marketing question.”
Any company supplying such devices also has to deal with distribution and training issues as well, he adds.
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