Mobile business booming
Merchant acquiring proves interesting opportunity
The concept of using intelligent mobile phones as credit card terminals is finally becoming mainstream, kickstarted by the innovative iPhone. Phones are being used transactionally not only by consumers in many regional trials around the world, but by retailers for merchant acquiring. This opens the way for companies to introduce loyalty schemes into the system.
Boston-based Merchant Warehouse has introduced an application for Apple iPhone and has now launched a similar app for several models of the BlackBerry. Both of the apps are free. Henry Helgeson, president and co-chief executive of Merchant Warehouse, says more than 1,000 merchants are now using the iPhone app, and downloads of the new Blackberry app have been “strong.”
Merchant Warehouse markets the apps under its MerchantWare Mobile and Capital Bankcard Mobile brands. Merchant Warehouse has about 55,000 merchants and says it is differentiating its mobile-phone applications by offering a proprietary gateway service.
Merchant Warehouse markets the apps under its MerchantWare Mobile and Capital Bankcard Mobile brands. They enable merchants to process credit and signature-debit card transactions at card-not-present interchange rates. The BlackBerry app also can handle card-present transactions, which are assessed lower interchange rates, if the merchant buys a $149 MagneSafe card reader. The reader, manufactured by MagTek Inc., transmits track data to the smart phone via Bluetooth technology. Nearly 40% of those who have downloaded the BlackBerry app have purchased the card reader, Helgeson says.
Merchant Warehouse, which has about 55,000 merchants, is differentiating its mobile-phone applications from the competition by offering a proprietary gateway service for free. Gateways such as CyberSource Corp.’s Authorize.Net and others enable online merchants to connect to the various payment networks, and the other mobile apps typically charge for them.