Card Payment Technology Update: Mobile Card Processing

Mobile Card Processing is an emerging technology targeted at small businesses that traditionally would not be able to accept payments by credit or debit cards. Think about it: people like chiropodists, mobile hairdressers, babysitters, plumbers, taxi-drivers, trade-fair exhibitors: anyone who runs their business at multiple locations and for whom a cash register and a merchant terminal would be impractical.

The idea is to harness the massive amount of processing power already lurking in commonly-owned devices such as the iPhone, iPad, iPod Touch or Android Phone, enabling their owners to use them as their card payments processor.

The new systems currently hitting the market include the Square, invented by Twitter founder and technology entrepreneur Jack Dorsey, Intuit GoPayment, from the purveyors of Quicken, QuickBooks and TurboTax, and Sage Mobile Payments.

The Square system, launched in the US in 2010, consists of a miniature (one-inch-square) card-swipe device which attaches to an iPhone or similar device. Square customers also need to download an app to their phone, but both the app and the plastic reader are provided free of charge. After the plastic device has captured the card details, the customer signs for the transaction using the iPhone touchpad. A nice touch that customers are enjoying is that when the transaction is finished, they shake the device like an Etch-a-Sketch, and the signature disappears. The vendor is charged a flat ate of 2.75% per transaction, with Square taking a variable cut depending on the credit card issuer.

GoPayment from Intuit, compatible with iPhone, iPad, iPod Touch and BlackBerry, also provides a free card reader and makes a charge for each transaction, and is currently offering a free 60-day trial.

Sage Mobile Payments, launched in February 2011, offers a credit card reader that can plug into the audio jack of a smartphone. The company plans to charge customers a setup fee and then a monthly amount starting at $10.95, but no transaction fees. Their intended customers are SMEs, with a higher payment transaction volume than the sole proprietor and microbusinesses targeted by Jack Dorsey's Square.

In summary, it looks like these mobile payment solutions are offering a cheaper (or free) , easy-to-use and portable alternative to the traditional card swipe terminal. Small business proprietors, in the US at least, no longer need to be tethered to a cash register, and have a new, viable alternative avoiding the setup costs currently charged for a merchant terminal. I will be keeping an eye on the progress of mobile payment systems over the coming months to see how they fare and who takes up the new technology.


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Charlotte Mooney is an IT professional with many years experience, now working for IT Software Consultancy Proswift, a leading provider of international credit system solutions to banks and finance houses. Click here for more topical stories from the world of credit card processing. ProSwift News