VeriFone Quietly ‘Responds’ With Two-Tier Rate Scheme For PayWare Mobile

Vendors often tout their products in press releases and through other efforts seeking publicity. But sometimes they choose to keep things relatively low key.

VeriFone Systems Inc., for example, nine months ago launched a two-tier rate scheme for its PayWare Mobile point-of-sale service, with merchants handling more than 1,500 transactions monthly receiving a lower rate. Though the move came not long after VeriFone made a strong public push to promote the new service, it only notified product resellers of the pricing change.

The terminal maker’s change in pricing for PayWare Mobile was in “response to what we hear from the market,” a spokesperson for the San Jose, Calif.-based POS-terminal maker tells PaymentsSource, which learned of the move through a promotional e-mail sent this week from a point-of-sale equipment distributor.

Pricing for PayWare Mobile, which includes software for Apple Inc.’s iPhone and other smartphones and a card reader, started when the product rolled out last January with a $15 monthly gateway fee plus 17 cents per transaction in addition to the normal discount rate, which includes interchange and other processing fees (see story).

In the revised system, 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.

VeriFone does not disclose its wholesale pricing, the spokesperson says. VeriFone’s resellers, such as merchant-service providers, set their own retail prices. VeriFone does not sell merchant-processing accounts.

Recently, competition for merchants using mobile POS services has increased. North American Bancard, a Troy, Mich.-based independent sales organization, on Jan. 28 launched Pay Anywhere, its own pay-as-you-go service (see story). And Sage Payment Solutions Inc. earlier this month launched a mobile service that provides small and midsize merchants lacking storefronts a low-cost option to accept credit and debit cards (see story).

Square Inc., Roam Data Inc. and Ingenico S.A. are among other companies with mobile POS services.

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