VeriFone Systems Inc. has turned its PayWare Mobile point-of-sale service into the equivalent of a multipurpose Swiss Army knife for payment acceptance, a necessary step to introduce the device to a global audience, according to the San Jose, Calif.-based payment-terminal maker.
The new device features a Payment Card Industry PIN-transaction security-certified PIN pad and both a contactless and a magnetic stripe card reader. The device will be available in Canada and the United Kingdom by the end of March. VeriFone also plans to introduce PayWare Mobile in other European countries, Latin America and Asia throughout the year (
VeriFone wanted to give merchants the ability to accept any payment option that might come their way.
“Our thinking has been that we have to be ready for all forms of payment, whatever comes next,” Tony Saunders, VeriFone marketing director in the UK, tells PaymentsSource. “We have to be sure our products are positioned to support any transaction capability.”
Nick Collin, a director at Collin Consulting Ltd. in London, views turning mobile phones into card-acceptance devices as a more promising market development than turning handsets into payment vehicles.
PayWare Mobile can pick up some significant traction in the UK as it moves away from checks, Collin adds. Some payments insiders in the region believe homebound citizens would have trouble paying for goods and services if they were unable to use a check, Collin says.
“Now if the plumber comes to make a repair and has one of these devices,” a card payment is doable, he says.
PayWare Mobile features the same technology as VeriFone’s point-of-sale terminals; the NFC capability is the same on the device as it is in the company’s VX line of terminals.
The final form factor, however, was difficult to accomplish, Saunders says.
“Anything that interacts with an Apple device is always a challenge,” he says. “Not only does the device have to be compatible with payment certifications, you also have to meet Apple certifications as well.”
The PIN-pad device only is available for the iPhone, but VeriFone is developing one for other devices, according to a company spokesperson.
VeriFone is seeking ways to distribute PayWare Mobile through multiple channels. The company continues to discuss partnerships with five merchant acquirers in the UK and with wireless operators that support Apple’s iPhone. VeriFone also will pursue merchants through its own relationships, Saunders says.
“We’re being very tactical with [distribution] and not taking a shotgun approach,” Saunders says. “We’re being very cautious and deliberate about who we engage with to go to market.”
VeriFone is still finalizing agreements with acquirers and other distribution channels, so PayWare Mobile’s pricing structure has not been determined, Saunders says. “There is not one cost structure, and that’s the problem we have in getting this to market through a number of different channels,” he adds.
What VeriFone knows is that merchants or their processors will pay a hardware cost and a monthly gateway service fee. Acquirers determine the transaction fees, Saunders says.
In the U.S., VeriFone uses a two-tier rate scheme for PayWare. Low-volume merchants with less than 1,500 monthly transactions pay a suggested retail rate of 2.75% of the sale plus 15 cents, but no monthly fee. They pay $99 for the accompanying card reader, which continues to sell for $149.95 on Apple Inc.’s website.
The suggested retail rate for higher-volume merchants is 1.65% plus 20 cents, but with $19.99 monthly fee, VeriFone says. The card reader is free with a two-year commitment, but there is a $29 activation fee.
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