The Green Sheet Online Edition
December 28, 2009 • Issue 09:12:02
Slip-on terminal mobility
A product from POS terminal manufacturer VeriFone is helping to usher in a new era in payment acceptance: the mobile terminal for the ordinary guy.
Granted, not just anyone can up and make a cellular phone a payment acceptance device (without an acquirer, processor, Visa Inc. and MasterCard Worldwide approval, and lots of paperwork), but with the emergence of devices that turn personal cell phones into payment terminals, a lot of paper-only salespeople will be looking at plastic.
Little more than a week after Twitter co-founder Jack Dorsey caused a media row by heralding the new mobile payment acceptance system Square, VeriFone unveiled a similar product called PAYware Mobile for iPhones.
It consists of two main devices: the first is a software program, downloadable from Apple Inc.'s iPhone App Store, that functions as the payment terminal; the second is a card swipe reader that fits neatly onto the phone like a sheath.
"We're really leveraging off the widespread adoption of smart phones and PDA's in general - and specifically the iPhone, which has had a lot of shipments in the last couple years" said Paul Rasori, VeriFone's Senior Vice President of Marketing. "[The iPhone] has a nice consistent form factor, which allowed us to develop a solution that both functionally works but is also very ergonomic and easy to use."
The product differs from most other mobile phone payment acceptance devices in a couple respects, Rasori said. One is the presence of a read-head so cards can be swiped rather than keyed in - a feature that Rasori said is not only convenient but also reassuring to consumers.
"Customers, hopefully, are going to be more trusting when you have this dedicated piece of hardware from a brand like VeriFone instead of just key entering info into someone's iPhone," he said. "You don't know how or where that's being captured."
How it captures card information is PAYware's second distinctive feature. Using VeriFone's payment security network VeriShield Protect, PAYware encrypts customer card information at the point of swipe and then keeps it secure all the way through to its arrival at the PAYware mobile gateway. Therefore, the solution leaves no window for hackers to pick off the data, Rasori said.
"We thought it was really important if we launch this product with a hardware peripheral for card reading that we actually put the technology directly into the mag stripe read-head in this device," Rasori noted. "It's a very unique feature where, as you're swiping the card, it's actually getting encrypted inside the reader, so it never reaches your iPhone in enencryped form. ... If the data is ever intercepted, whether by malware or some other mechanism, it's useless."
Rasori added that the extra cost of using a magnetic stripe reader would be more than offset by the lower interchange rates for card swipe terminals than key-entry ones. "By turning our device into card present, the claim we're making is you can save enough money to pay for our payment application, our hardware and your iPhone," he said.
Customer signature capture and receipt
PAYware mobile requires that customers sign the iPhone screen using a stylist pen to complete payment card transactions. Customers may also receive e-mail receipts for purchases. Rasori said the product did not as yet contain a PIN debit feature, but that VeriFone was working to develop new models of PAYware with that capability.
He said the PAYware card reader "uses almost no battery and pulls power from the phone," and thus doesn't need to be recharged separately. It is also "plug and play," meaning merchants who use the device can simply slide it onto their iPhone without having to program the phone or change its mode.
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