06 July 2012 7:08am
Innovation around mobile payments is bouncing along, with payment services provider Paymate launching a smartphone application that turns the phone into a payment terminal.
To use the service, labelled Paymate OnTheGo, merchants will purchase a device that attaches to an iPhone, iPad or Android phone and download an app. The device, the Swiper, reads the magnetic stripe on a credit or scheme debit card.
The Swiper will sell for A$19.95. The service fee is 2.25 per cent plus 50 cents for each transaction.
For product differentiation from PayPal Here (which designed a triangular device), Paymate have opted for a semi-circle. Both may have wanted to distinguish themselves from the square-shaped device used by Square in the US. Square has pioneered this form of payment handling.
Paymate said payment information is encrypted so that customer information is not transmitted over a mobile network. Purchasers receive their receipts by email.
OnTheGo is Paymate's first business development since it changed hands in March. Finance company FlexiGroup acquired the Australian, New Zealand and Asian businesses arm of Paymate. At the time of the acquisition FlexiGroup said Paymate had 3500 merchant customers.
Paymate's OnTheGo is similar to PayPal Here, which was announced in March and has been progressively offered to interested merchants only in recent weeks.
FlexiGroup's head of e-commerce, Andrew Pipolo, said: "This is a hot market. It will allow the microbusiness sector to take card payments.
"For a tradesman, whose usual practice is to invoice and then chase payments, this is a simple, secure, low-cost alternative."