United Bank Card Inc. recently entered the iPhone-as-a-terminal scene. The company now processes iPhone transactions conducted through an Authorize.Net online gateway via the iPhone credit card application. Merchants can download the application through Apple Inc.'s App Store. UBC offers Class B support for the transactions.
"We are very excited about this development," UBC Chief Executive Officer Jared Isaacman said in a statement." United Bank Card has always been at the forefront of innovation, and as new payment technologies emerge, we will continue to embrace such advancements."
"The phenomenon of taking payment for goods and services via a handheld device is not necessarily new with the iPhone," said David Schwartz, Director of Marketing for Authorize.Net. He added that his company has supported several devices for a number of years.
"Most of the devices prior to the iPhone were specialty devices, though, that were custom built to accept mobile payments," he said. "For example, there's a product called Pocket Chef, which waiters use to not only take orders at tables but also to accept payment for the meals right there at the table, and therefore the credit card never has to leave the view of the diners.
Schwartz reported that Authorize.Net has certified seven handheld, payment-acceptance devices to its application program interface (API), one of which is an iPhone. "They're smart phones or handheld devices that are using the cellular network to manage payments," he said. "We are device agnostic."
He also said seven companies have integrated into Authorize.Net's API for use with the iPhone; Inner Fence LLC's solution is the first to be certified by Authorize.Net. (The Green Sheet featured Inner Fence's iPhone payment terminal application in "Accepting payments, iPhone style," March 23, 2009, issue 09:03:02.)
Gregory Holmes, an independent payment consultant, believes the ability to do mobile payments opens up a new class of merchants to the payments industry: folks who've never really thought about accepting cards but who use the mobile phone as their primary means of commerce.
"So you get into companies like service providers, lawn services, cleaning services, handymen operations, small contract project work," Holmes said. "And to them, this is a further way to use their smart phone, which has become their life-blood, if you will, for their business."
According to Holmes, iPhone terminals will also appeal to merchants who traditionally have had to spend several hundred dollars to buy or lease wireless terminals. "Given the nature of keying in the transactions one by one, it is most appropriate for somebody who's not doing any kind of high transaction volume whatsoever," he added.
Holmes predicts near field communication will take the lead in the United States with regard to mobile payments. For Schwartz, the most intriguing question, particularly regarding the iPhone, is whether Apple will certify a hardware addition to enable card swiping. "Right now each transaction that is processed through an iPhone is a card-not-present transaction," he said. "There are higher fees associated with that.
"If Apple were to certify some sort of swipe device that could connect directly to the iPhone, thereby turning the transaction into a card-present transaction, that could potentially extend the adoption because the rates are so much more favorable and because most of these merchants may potentially already have a card-present merchant account."
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