VeriFone Holdings Inc. last week named Chase Paymentech Solutions LLC as one of its preferred merchant processors for users of its mobile phone card reader.
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,” VeriFone says.
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.
VeriFone is smart to offer a smartphone payment application, says Chuck Fillinger, senior associate at The Strawhecker Group, an Omaha, Neb.-based payments consultancy.
“The handset will replace bigger, more expensive wireless terminals,” Fillinger says.
Processors and acquirers also can benefit from mobile-phone acceptance because it potentially could mean new merchants, he says. Home-service businesses, whose employees likely already have cell phones, and in-home salespeople could use applications like PayWare Mobile, Fillinger says.
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, VeriFone says.
PayWare Mobile first became available through resellers in January. VeriFone says the card reader is now available in Apple stores and will show up on Apple’s Web site soon.
“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,” VeriFone 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.”
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,” the VeriFone spokesperson says.
VeriFone would not provide details on the terms of VeriFone’s contract with Chase Paymentech.
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.
Andrew Johnson is a reporter with ISO&Agent Weekly sister publication American Banker.
