By Ben Goretsky
USA ePay
We've all seen Apple Inc.'s iPhone commercial highlighting some of the latest business applications for its phone, which features a credit card application. What a great idea: process credit card transactions right through your phone by just punching in the credit card number, expiration date, et cetera, and pressing "Process."
But is this really such a new idea? Not by a long shot. Mobile payments have been out for a while, so why all the buzz now?
Early on, mobile payments were done through phones like the i-Series Motorola models. Then came the Java-based phones offered by companies like Nokia, Toshiba America Inc. and Samsung. All these phones created the ability to accept credit card payments on multiple networks.
Sure the screens were small; the networks were slow. But the ability was there, and the concept sold.
Then came smart phones, and for every model released, software was rolled out. Blackberrys and Windows Mobile devices were readily available on multiple networks. With them came software that allowed anyone to swipe a card (using an attachment to the phone) and process a transaction right through a smart phone.
Today, transactions accepted via Blackberry and Windows Mobile applications qualify for swipe retail rates, so why is so much attention on the iPhone? Transactions accepted via iPhone currently are categorized as nonqualified retail or manually keyed.
Comparing rates for processing swiped transactions through the Blackberry and Windows Mobile devices to the cost of processing manually keyed transactions through the iPhone, we know the merchant saves money by steering clear of the iPhone.
Also, Blackberry and Windows Mobile devices are available on all payment networks, and every network has at least three models of each type. In contrast, the iPhone is only supported through one network.
In addition, devices like the Blackberry and Windows Mobile phones are available worldwide and considerably more affordable to purchase than iPhones.
It's no longer the size of the screen or speed of the network that matters; it's that the iPhone embodies cool. It's not that mobile payments are popular; it's that the iPhone is all the rage.
And when you add something old to something new, the old thing seems new.
Frankly, this techie is excited about the re-emergence of the mobile payment game. It's been a struggle convincing the big companies out there that mobile payment applications are the future of retail transactions. And if the iPhone is the way to open their eyes and minds to this idea, so be it.
With iPhone 3.0 on the horizon, I guarantee the iPhone apps will support swipes and maybe, just maybe, we will be able to move significantly forward on this old idea that never got the spotlight it deserved.
Ben Goretsky is the Chief Executive Officer and head of IT Development at USA ePay. He has been working with his brother Alex since they started the company in 1998. E-mail him at ben@usaepay.com or call him at 866-872-3729, ext. 350.
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