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The coming age of mobile payments: introducing the players

Mobile technology continues to revolutionise how we interact socially and how we do business in ever-more astonishing and ingenious ways. This post explores the development of mobile payments, and details the services offered by the major players in the market. These methods of payment are rapidly becoming an adopted method for making and receiving payments, and it will be fascinating to see to what degree this technology eclipses traditional methods of financial interaction in the coming years.

Types of mobile payments

There are several principal types of mobile payment including SMS-based transactions; direct mobile billing; mobile web payments (WAP); contact-less near field communication (NFC); and credit card reader and processing apps. The majority of the players listed below are involved with the latter model of mobile payments, providers of apps and devices that convert mobile phones into credit card terminals.

Essentially this type of payment is facilitated by a physical piece of kit that is attached to a mobile device, enabling credit cards to be swiped, or chip and PIN cards read, and a related app which powers the payment process. Some of these systems are designed specifically for the iPhone, but with an increasing number of Android phones appearing on the market, multi-device compatible systems are providing a better business model.

As customer demand picks up, many merchants are starting to see the benefits of offering a mobile payment alternative. Start-ups such as Square, GoPayment, and PAYware Mobile are great for small businesses and traders such as stallholders, waiting staff and shopkeepers, and these methods could also become feasible options for larger enterprises.

Mobile payments are also changing how we make online payments, with PayPal offering a dedicated mobile app for eBay shopping and services such as Zong opening mobile payments to a younger audience and those without credit cards.

Obviously, for this new way to pay to take off, customers must feel confident that their transactions are secure, and companies want to minimise the possibilities of data compromise and fraud. Providers of mobile payment services are covered by the Payment Application Data Security Standard (PA-DSS), a set of global industry standards and certificates that demand software vendors supply secure systems. Those failing to meet the PA-DSS criteria face cash fines and loss of certification.

The new who’s who of mobile payments

Mobile payments are clearly changing many aspects of business and are likely to become a normal part of our financial lives. Analysts have estimated that by 2014 the mobile payment market will be worth more than half a trillion US dollars so it’s no surprise that many companies and entrepreneurs are hunting a share of the industry. Below I take a look at the key players and systems, plus some emerging market entrants to watch in this coming age of mobile payments.


San Francisco-based mobile payment facilitator Square was one of the first of its kind, and continues to be one of the leading players in the market despite a growing number of rivals.

Co-founded by Twitter creator Jack Dorsey, Square uses a neat little card reader that plugs directly into the headphone jack of any iPhone, iPad or Android-based phone, transforming the device into a mobile credit card terminal. It’s free to download the related app from iTunes or Android Market, the reader itself is also given free-of charge, and there are no monthly fees.

Square makes money for its providers by taking a percentage of every transaction made with the device. Although some of the emerging players competing with Square offer better rates, it continues to be one of the most attractive and trusted options.

In the words of creator Dorsey, ‘Square intends to bring immediacy, transparency, and approachability to the financial world. We want to enable all people to accept payments instantly, with access to all the information they need, in a way that feels amazing and engaging.’


GoPayment is a great app from Intuit that turns a smart phone into a mobile credit card terminal.

Currently Intuit are offering free card readers compatible with most brands of phone, and when twinned with an Intuit Merchant Account it is extremely simple to set up and start accepting card payments directly and instantly. The system is free to use for small-scale operations, but merchants processing more than £1,000 per month may wish to upgrade to the benefits of a premium account with a $12.95 monthly subscription.

The developers at Intuit are considered as one of the leading providers of mobile payment solutions, particularly in helping small business transactions. The company also makes QuickBooks accounting software and it is simple to sync GoPayment to manage financial records.


Zong is a mobile payment company that focuses its attention on social networking and online gaming markets, aiming at allowing younger users and those with no bank account to make small online payments. It works by providing a Zong button as an option on websites’ payment pages; users click on the button, enter their phone number and then a secure PIN is sent to their phone. The payer enters this code and payment is charged directly to the phone’s billing account.

It’s an attractive and secure system, and opens up the market to a huge demographic that would otherwise be unable to purchase services from online merchants.

PayPal Mobile

PayPal have developed an app allowing customers to manage their PayPal account via their mobile device. PayPal Mobile enables online payments and transfers, collecting and sending money, checking account history and mobile shopping on eBay.

The application is compatible with all major mobile operating systems and browsers, and customers may use text messaging to access PayPal. It’s even possible to send money with PayPal by bumping phones. PayPal ensure maximum security on all payments that they handle, and every transaction requires a PIN or password so customers are safe even if they lose their phone.

PAYware Mobile

Verifone presents PAYware Mobile, a compact mobile payment device, which coupled with the iPhone allows merchants to accept transactions wherever their business takes place. The device itself is compact and hardwearing, fitting securely to the iPhone, accepting payments on all kinds of transactions including credit, debit and card-not-present payments.

Chip and PIN-based transactions are handled with the PIN keyboard on the device’s reverse. The system encourages customer trust with secure end-to-end encrypted processes, and reduces the seller’s liability risks and protects against pay disputes.

PAYware Mobile is very easy to set up and synch with existing merchant accounts; if the trader doesn’t have such an account Verifone will assist in creating one.


Moped is an app and integrated magnetic card strip reader that enables merchants to take secure payments in multiple currencies. It’s a fast, convenient solution for business operatives of any size, from small-scale traders to large point-of-sale enterprises.

The system is essentially paperless, with receipts sent electronically to phones and email, and the application is easy to sync with the developer’s robust online web application. This management software allows merchants to process transactions from any web browser and export financial data to accountancy records.

Moped is designed to be highly fraud-resistant, meeting all the industry security standards with data encryption, GPS mapping, and signature and photo verification.

iPay POS

iPay POS is a point-of-sale app offering complete mobile payment processing on the move. Developers Rapadev have designed the application to be multi-gateway compatible, and works with a growing list of card readers. Used in conjunction with a card reader the app offers better rates, minimises input mistakes and helps create a professional image for business users’ documentation.

It is also a very secure payment method since the code has been rigorously tested to meet PA-DSS certification. The application’s other key features include email receipts, transactions log, automatic billing and GPS tagging.


Swipe is a credit card terminal application from AppNinjas developers, available from iTunes for $0.99, complete with a free credit card swiper.

Once attached, the swiper transforms an iPhone or iPod touch into a safe and secure terminal, taking payments wherever there’s an Internet connection. Users can generate customised receipts, instantly sent to customers and helping brand the product and promote a professional image.

Swipe accepts international currencies, offers GPS mapping and signature capture, and boasts advanced fraud detection for peace of mind.

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David Boyd

David Boyd

David is the founder of Credit Card Compare, a free-to-use, independent credit card comparison website that allows Australians to compare, review and self-select a credit product, including a range of <a href="http://www.creditcardcompare.com.au/business-credit-cards.php">small business credit cards</a>. You can follow David on Twitter @theCreditLetter

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