Bank of America to rival Square, PayPal Here with mobile payments reader
Bank of America is the latest entrant into the booming mobile payments processing segment. The company announced today it will introduce the Mobile Pay on Demand platform Dec. 3.
Mobile Pay on Demand closely resembles rival efforts like Square and PayPal Here: The service enables small business owners to process credit and debit transactions by swiping the customer's card through a dongle plugged into their smartphone or tablet audio jack. Bank of America will bill a 2.7 percent flat fee for all swiped transactions, promising no monthly or annual charges alongside next-day access to funds--the dongle will be given away free, and the bank also will release free applications optimized for devices running and Apple's (NASDAQ:AAPL) iOS and Google's (NASDAQ:GOOG) Android.
In addition to Square (which charges 2.75 percent per transaction) and PayPal Here (which bills a 2.7 percent fee), Mobile Pay on Demand must also grapple with competitors like GrouponPayments, which claims just 1.8 percent plus $0.15 of each MasterCard, Visa and Discover transaction and 3 percent/$0.15 of each American Express transaction, as well as Intuit's GoPayment, which enables merchants to swipe cards (charging 2.7 percent) or manually enter transactions (billing 3.7 percent).
Trevor Rubel, executive vice president of Bank of America's strategy and emerging products division, tells AllThingsD that the company will leverage its brand and its existing retail relationships to compete in the segment. Bank of America also will offer a free one-year subscription to its digital deals marketing and syndication platform (a $200 value) to all merchants that sign up for Mobile Pay on Demand by the end of 2012. Rubel notes that roughly 2 million Bank of America small and medium-sized business customers don't use its existing payment terminal services, either because they don't process enough transactions to justify the costs or because they work on the go.
Beyond Mobile Pay on Demand, Bank of America is currently testing a mobile payments pilot program that bypasses Near Field Communications technology in favor of QR code-based transactions. Launched earlier this fall in collaboration with cloud-based mobile payment services firm Paydiant, the trial spans five merchant locations near Bank of America's Charlotte, N.C., corporate headquarters and enables smartphone-equipped shoppers to complete purchases by scanning a QR code displayed at the point of sale. The Paydiant application completes the purchase by debiting Bank of America account information stored in the cloud.
- read this AllThingsD article
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