VeriFone Holdings Inc. on Thursday named Chase Paymentech Solutions LLC as one of its preferred merchant processors for users of its mobile phone card reader.
The San Jose, Calif.-based terminal maker’s PayWare Mobile device attaches to the bottom of Apple Inc.’s iPhone and enables individuals to accept card-present credit and debit transactions.
Almost every major processor already supports PayWare mobile, says Pete Bartolik, a VeriFone spokesperson. (An exception is Heartland Payment Systems Inc., which is embroiled in a legal dispute with VeriFone.)
PayWare Mobile first became available through resellers in January. Apple expects to begin selling them through its retail stores and online by Tuesday.
“If someone goes into an Apple store or Apple online and has an existing merchant-account relationship, then they can go straight to that provider; they don’t have to go to Paymentech,” Bartolik says. “This is really geared toward people who don’t have a merchant account. It’s really focused on getting these people up and running as quickly and easily as possible.”
Chase Paymentech is the second preferred processor for PayWare Mobile; VeriFone in December named Kohlberg Kravis Roberts & Co.’s First Data Corp. as a preferred provider when it first introduced the device.
“You’ll see other processors step into the PayWare Mobile market as well,” Bartolik says.
VeriFone chose Chase Paymentech, a subsidiary of JPMorgan Chase & Co. and one of the largest merchant processors in the country, because of the Dallas-based company’s “willingness to dedicate trained salespeople” to market the system and its “proven ability to provide quality service to the market,” he says.
Bartolik would not provide details on the terms of VeriFone’s contract with Chase Paymentech.
VeriFone is aiming PayWare Mobile at small businesses that do not accept credit or debit cards. Because customers can swipe their cards through the device, merchants can avoid paying the higher fees for card-not-present transactions incurred when using some other mobile phone card readers that do not support swiping.
The device could help small entrepreneurs prevent missed sales opportunities resulting from customers who do not want to pay with cash or check, Bartolik says. In the past, such “micromerchants” have seen little return on investment for offering the ability to pay via a card, he says.
VeriFone has said it is working on versions of PayWare for other mobile phones, including Research in Motion Ltd.’s BlackBerry devices and phones that use Google Inc.’s Android or Microsoft Corp.’s Windows Mobile operating systems.
“The goal is to make this product available broadly in the method of distribution that most suits the end user,” Bartolik says.
